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Presentation, discussion, and possible action regarding a waiver of 10 TAC §11.101(b)(1)(A)(viii) for South Union Place Apartments
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RECOMMENDED ACTION
recommendation
WHEREAS, South Union Place is a proposed 2026 9% Housing Tax Credit Application for the acquisition and rehabilitation of 125 Units in Houston, Harris County, with an Elderly Target Population;
WHEREAS, to ensure the best use of the Department’s limited resources, 10 TAC §11.101(b)(1)(A)(viii) establishes that a Competitive Housing Tax Credit Application is not eligible if it involves the rehabilitation of an existing Housing Tax Credit Development that has any building that placed in service on or after January 1, 2006;
WHEREAS, South Union Place placed in service at the end of 2006, and therefore is not eligible to compete without a waiver of the age requirement; and
WHEREAS, the Applicant has requested such a waiver, on the basis that the conditions at the Development represent an overwhelming need, but staff is unable to conclude that such overwhelming need exists;
NOW, therefore, it is hereby
RESOLVED, that the waiver of 10 TAC §11.101(b)(1)(A)(viii) for South Union Place Apartments is denied.
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BACKGROUND
South Union Place is a proposed 2026 9% Housing Tax Credit Application for the acquisition and rehabilitation of 125 Units in Houston, Harris County, with an Elderly Target Population.
The 2026 Qualified Allocation Plan (QAP) includes a new provision that makes the following Applications ineligible:
(viii) Competitive Housing Tax Credit Applications that involve any existing Housing Tax Credit Development that has any building that placed in service on or after January 1, 2006, for its most recent award of Housing Tax Credits.
This rule was added to prevent Developments that have already been funded with Housing Tax Credits from prematurely applying for additional Rehabilitation funding. 2006 was chosen as a cutoff, as twenty years is a general benchmark for when some major systems and components such as roofing and HVAC should be replaced.
South Union Place Apartments was initially funded with Housing Tax Credits and placed in service in December 2006. Because of this, the project is approximately one year shy of the age requirement to be eligible in the 2026 competitive cycle. The Applicant has requested a waiver of this requirement on the basis that current conditions at the Development represent an overwhelming need. Specifically, the request cites mold removal, lighting upgrades, and HVAC replacements as necessary work that should not be delayed another year. The Applicant submitted a General Contractor Statement of Work as well as excerpts from a Property Condition Assessment to support its request. These documents are attached to this item.
The Board may grant waivers of non-statutory rules if certain criteria are met. The waiver must demonstrate how it better serves the policies and purposes outlined for the Department in Tex. Gov’t Code §2306, which are general in nature and include items such as assisting local governments in providing essential services, providing for the housing needs of those with moderate incomes, and contributing to the preservation and development of communities. The waiver must also demonstrate that the need for it is either outside of the control of the Applicant or is the result of an overwhelming need.
Staff has reviewed the information provided by the Applicant and is unable to conclude that the project’s condition represents an overwhelming need for this waiver. While the documents demonstrate that the property is in a state of moderate disrepair, the scope of work necessary appears to be typical for a property of this age. Because of this, staff recommends that the Board deny the waiver.