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Presentation, discussion, and possible action regarding a Material Amendment to the Housing Tax Credit Application for Centerpoint Commons (HTC #24400)
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RECOMMENDED ACTION
recommendation
WHEREAS, Centerpoint Commons (Development) received an award of 4% Housing Tax Credits (HTCs) in 2024 for the new construction of 363 multifamily units in San Marcos, Hays County;
WHEREAS, SL Centerpoint Commons, LP (the Applicant) requests approval for a change in the unit mix due to requirements from the City of San Marcos (the City) not allowing four-bedroom units under its multifamily regulations and also requiring a minimum of 35% of units in affordable housing developments to be three-bedroom units;
WHEREAS, the Applicant requests approval to lease the four-bedroom units as three-bedroom units with a den area without impacting the total number of units or impacting the overall income and rent restrictions;
WHEREAS, Board approval is required for a modification of the bedroom mix of units as directed in Tex. Gov’t Code §2306.6712(d)(2) and 10 TAC §10.405(a)(4)(B), and the Applicant has complied with the amendment requirements therein; and
WHEREAS, the requested changes to the bedroom mix do not materially alter the Development in a negative manner, would not have adversely affected the selection of the Application, and do not impact the viability of the transaction;
NOW, therefore, it is hereby
RESOLVED, that the requested material amendment to the Application for Centerpoint Commons is approved as presented at this meeting, and the Executive Director and his designees are each authorized, directed, and empowered to take all necessary action to effectuate the Board’s determination.
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BACKGROUND
Centerpoint Commons received an award of 4% Housing Tax Credits in 2024 for the new construction of 363 multifamily units, all of which are low-income units, in San Marcos, Hays County. In a letter dated September 16, 2024, Lora Myrick, on behalf of the Applicant, requested approval for a material amendment to the Application. The amendment request proposes a change in the unit mix and explains that the change is necessary because the City of San Marcos does not allow four-bedroom units under their multifamily regulations. The issue was not brought to the Applicant’s attention until the application for a Resolution of No Objection was submitted. It was also realized that the City of San Marcos requires a minimum of 35% of units in affordable housing developments to be three-bedroom units. By incorporating four-bedroom units, it was thought the minimum requirement would be satisfied. To remedy both issues encountered, the Applicant proposes to lease the 24 four-bedroom units as three-bedroom units with a den area. The total number of units will not change.
The Applicant intended to provide larger units for families; however, the City implemented the prohibition of four-bedroom units to deter renting by bedrooms to students, which was an unintended consequence for affordable housing developments. Adjustments were made to some units’ Area Median Income (AMI) designation to accommodate for the loss of income from the four-bedroom rents, but the overall income and rent restrictions did not change. The Development still meets the 15% at 30% AMI and 85% at 60% AMI designations for Priority 2 status for the bond financing. Additionally, the square footage of two floor plans have changed. The area of the two-bedroom units increased from 893 square feet to 935 square feet, and the area of the three-bedroom units with a C1 floorplan decreased from 1,079 square feet to 1,029 square feet. Overall, the net rentable square footage increased from 341,733 to 344,331, which represents an increase of less than 1%.
The Development was re-underwritten based on the proposed amendment and revised financial information submitted with the request. The results of the analysis indicate the Development is still feasible with no changes to the costs and financing structure and that there is no change to the HTC award.
Staff recommends approval of the requested material amendment to the Application.