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Presentation, discussion, and possible action on the 2025 Regional Allocation Formula Methodology
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WHEREAS, Tex. Gov’t Code §§2306.1115 and 2306.111(d) require that the Texas Department of Housing and Community Affairs (TDHCA or the Department) use a Regional Allocation Formula (RAF) to allocate its HOME Investment Partnerships (HOME) Program, Housing Tax Credit (HTC) Program, and under certain circumstances, the Texas Housing Trust Fund (HTF) Program funding;
WHEREAS, the proposed RAF Methodology utilizes appropriate statistical data to measure affordable housing needs, available housing resources, and other factors determined by the Department to be relevant to the equitable distribution of housing funds in the urban and rural areas of the 13 State Service Regions used for planning purposes; and
WHEREAS, the proposed RAF Methodology was approved by the Governing Board of the Department at the meeting of May 9, 2024, and was available for public comment through June 20, 2024, and no public comment was received;
NOW, therefore, it is hereby
RESOLVED, that the 2025 RAF Methodology for the HOME, HTC, and, as applicable, HTF programs, in the form presented at this meeting, is hereby approved.
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BACKGROUND
The Department uses the Regional Allocation Formula (RAF) for planning purposes by utilizing appropriate statistical data to measure the affordable housing need and available resources in the 13 State Service Regions. The RAF also guides the allocation of funding to rural and urban areas within each region. The Department has flexibility in determining variables to be used in the RAF, per Tex. Gov’t Code §2306.1115(a)(3), “the department shall develop a formula that…includes other factors determined by the department to be relevant to the equitable distribution of housing funds.”
The Department revises the RAF annually to reflect current data, respond to public comment, and better assess regional housing needs and available resources. In prior RAF cycles the RAF Methodology was updated to refine the use of Metropolitan Statistical Areas (MSAs) by using “MSA counties with urban places” and “Non-MSA counties or counties with only rural places” instead of using just MSA and Non-MSA counties to allocate between urban and rural areas. This accounts for the fact that even though a county may be a part of an MSA, all the places within that county may meet the definition of rural per Tex. Gov’t Code §2306.004(28-a). For 2025, Clay County has been changed from rural to urban due to an expansion of the City of Wichita Falls into Clay County.
Factors for lack of kitchen and plumbing facilities are used to measure housing need for Single Family activities, as well as an additional factor for Single Family Activities called the Regional Coverage. The Regional Coverage Factor takes into account the smaller populations of rural areas as well as scattered locations of single family projects, instead of relying solely on population as an absolute.
The 2025 RAF Methodology explains the use of factors, in keeping with the statutory requirements, which include the need for housing assistance, the availability of housing resources, and other factors relevant to the equitable distribution of housing funds in urban and rural areas of the state.
The Single Family HOME, Multifamily HOME, HTC, and HTF program RAFs each use slightly different formulas because the programs have different eligible activities, households, and geographical service areas. For example, Tex. Gov’t Code §2306.111(c) requires that 95% of HOME funding be set aside for non-participating jurisdictions (non-PJs). Therefore, the Single Family and Multifamily HOME RAFs only use need and available resource data for non-PJs.
The 2025 draft RAF was made available for public comment on the TDHCA Public Comment Center at <https://www.tdhca.texas.gov/tdhca-public-comment-center>. The public comment period was open from Monday, May 20, 2024, through Thursday, June 20, 2024, at 5:00 p.m. Austin local time, and a public hearing was held on Tuesday, June 4, 2024, at 2:00 p.m. No Public Comment was received.
The following attachments are provided:
A. 2025 RAF Methodology
B. Example 2025 HOME SF RAF
C. Example 2025 HTF RAF
D. Example 2025 HOME MF RAF
E. Example 2025 HTC RAF
Staff recommends approving the 2025 RAF Methodology as presented at the board meeting of July 11, 2024. Once approved, the 2025 RAF Methodology will be published on the Department’s website. It should be noted with this action that the Board is approving the publication of the methodology, not specific allocation amounts. Total available program amounts will be applied to this adopted methodology and regional allocation amounts made available by each program.
To the extent funds received/proposed to be used fall below the statutory minimum for any program/activity, or if the proposed activities fall into a statutory exception, the RAF will not be used for the program/activity in question.