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Presentation, discussion, and possible action on authority for processing of amendments to extend elderly restrictions past the Compliance Period as non-material amendments
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RECOMMENDED ACTION
recommendation
WHEREAS, 10 TAC §10.405(b)(2)(C) states that changes to the Target Population are material amendments to the Land Use Restriction Agreement (LURA);
WHEREAS, 10 TAC §11.1(d)(47) defines an Elderly Development as a development that either meets the requirements of the Housing for Older Persons Act (HOPA) under the Fair Housing Act, or a development that receives federal funding that has a requirement for a preference or limitation for elderly persons or households, but must accept qualified households with children;
WHEREAS, under 10 TAC §11.1(d)(126) Target Population is the designation of types of housing populations which include Elderly Developments and those that are Supportive Housing, and all others will be considered to serve general populations without regard to any subpopulations, although the application may request that any other populations required for targeting, preference, or limitation by a federal or state fund source are identified;
WHEREAS, the LURA must have an Elderly Restriction in it to be Elderly because otherwise tenants cannot enforce the restrictions as required by §2306.269 of the Tex. Gov’t Code, which states that the Department shall set standards for tenant and management selection by a housing sponsor;
WHEREAS, LURAs for Housing Tax Credit (HTC) developments from several award years require that the Elderly Restriction be in place throughout the Compliance Period, which is usually 15 years, but may be longer, and the Elderly Restriction does not run until the end of the term of the LURA;
WHEREAS, the Department has received requests, after the end of the Compliance Period, to amend the LURAs for several developments to extend the Elderly Requirement throughout the term of the LURA; and
WHEREAS, staff requests that the Board grant staff the authority to process the requests to extend the Elderly requirement as non-material amendments where the Elderly restrictions have expired within two years of the request, but the Owner has certified that the property has continued to operate as Elderly;
NOW, therefore, it is hereby
RESOLVED, that the requested authority for staff to process amendments to extend the Elderly Restrictions as non-material amendments 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 foregoing.
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BACKGROUND
Texas Gov’t Code §2306.185(d) states that the development restrictions provided by Subsection (a) and by Texas Gov’t Code §2306.269 be enforceable by the Department, by tenants of the development, or by private parties against the initial owner or any subsequent owner. The Department must require a Land Use Restriction Agreement (LURA) providing for enforcement of the restrictions by the Department, a tenant, or a private party that includes the right to recover reasonable attorney's fees if the party seeking enforcement of the restriction is successful.
10 TAC §10.405(b)(2)(C) states that changes to the target population are material amendments to the LURA, requiring Board approval. Development owners seeking a material LURA amendment must submit the request and all required documentation necessary for staff's review of the request to the Department at least 45 calendar days prior to the Board meeting at which the amendment is anticipated to be considered.
10 TAC §11.1(d)(47) defines Elderly Development as a development that either meets the requirements of the Housing for Older Persons Act (HOPA) under the Fair Housing Act, or a development that receives federal funding that has a requirement for a preference or limitation for elderly persons or households, but must accept qualified households with children.
10 TAC §11.1(d)(126) defines Target Population as the designation of types of housing populations that shall include Elderly Developments and those that are Supportive Housing. All others will be considered to serve general populations without regard to any subpopulations, although the application may request that any other populations required for targeting, preference, or limitation by a federal or state fund source are identified.
A LURA must have an Elderly Restriction in it for the development to be for the Elderly. This is because otherwise tenants cannot enforce the restrictions as required by statute. When the Elderly Restrictions expire, the development becomes a general population development under the statute and regulations, except if there is a different federal restriction requiring an Elderly population where the Department has signed a subordination agreement. In this case, if the federal restriction was present at application, staff has historically processed this type of amendment as a mutual mistake.
Over the years, the Qualified Allocation Plans have required that the Elderly Restriction be throughout the Compliance Period, which is usually 15 years but may be longer, or throughout the term of the LURA, and this requirement is reflected in the LURA. As a result, after the expiration of the Compliance Period, a change back to the previous Elderly Restriction would be considered a material amendment to the LURA. If the amendment to extend the Elderly Restriction is processed during the Compliance Period, while the Development is still restricted for the Elderly, this has historically not been considered a material amendment for a change to the Target Population, and staff has historically approved these non-material amendments.
Staff is requesting permission from the Board, that for developments where the Elderly restrictions have expired within two years of the amendment request to extend the Elderly Restriction and that the owner has certified that the property has continued to operate as Elderly and meets the requirements of the Housing for Older Persons Act, that staff be given the authority to process the transactions as a non-material amendment.