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Presentation, discussion and possible action regarding a waiver of 10 TAC §11.101(b)(1)(A)(vii) of the Qualified Allocation Plan (QAP) relating to the percentage of efficiency and/or one-bedroom units for Mesa Hills I (#25451).
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RECOMMENDED ACTION
recommendation
WHEREAS, a 4% Housing Tax Credit application for Mesa Hills I was submitted to the Department on February 5, 2025;
WHEREAS, the unit mix includes more than 35% one-bedroom units, which exceeds the threshold allowed in 10 TAC §11.101(b)(1)(A)(vii) of the 2025 QAP, thus rendering the development ineligible;
WHEREAS, in conjunction with the 4% Housing Tax Credit application, the applicant also submitted a request to waive 10 TAC §11.101(b)(1)(A)(vii); and
WHEREAS, staff recommends a waiver be granted pursuant to 10 TAC §11.207 based on specific factors related to the proposed development and its associated timeline as further discussed herein;
NOW, therefore, it is hereby
RESOLVED, that a waiver of §11.101(b)(1)(A)(vii) of the 2025 QAP relating to the allowable percentage of efficiency and/or one-bedroom units for Mesa Hills I is hereby approved.
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BACKGROUND
General Information: Mesa Hills I is to be located in El Paso, El Paso County, and proposes the new construction of 64 units that will serve the general population. The development applied for Traditional Carryforward in December 2023 and received a Carryforward Designation Certificate on January 17, 2024. The Traditional Carryforward Designation does not require any specific restrictions on rent or income and expires on December 31, 2026. According to the tax credit application submitted, 44 of the units will be income- and rent-restricted at 50% of Area Median Family Income (AMFI), and 20 units will be rent- and income-restricted at 60% of AMFI.
Waiver Request: Pursuant to §11.101(b)(1)(A)(vii) of the QAP, “any New Construction, Reconstruction, or Adaptive Reuse Development proposing more than 35% efficiency and/or one-Bedroom Units will be considered ineligible. This requirement will not apply to Elderly or Supportive Housing Developments.”
The unit mix for Mesa Hills I consists of 24 one-bedroom units, 24 two-bedroom units, and 16 three-bedroom units. The number of one-bedroom units comprises 37.5% of the total unit count. The applicant has requested a waiver of the aforementioned rule, so that the development may be eligible without necessitating a change to the currently proposed unit mix.
According to the waiver request submitted, design and planning of the development began in 2020. Around that time, Housing Opportunities Management Enterprises (HOME), an instrumentality of the Housing Authority of El Paso, contacted commercial and residential members of the community and requested their approval to remove a 1980s-era restrictive covenant that prohibited low-income housing owned or operated by a governmental entity on the proposed site. After being denied that request, HOME entered into a lawsuit against the commercial and multifamily residential owners in the subdivision. Ultimately, the parties reached an agreement that would limit density of the site and provide more open space. In September 2024, the court ordered the restrictive covenant be removed.
Concurrently with the litigation, the applicant (HOME) also submitted a request for rezoning to the City of El Paso. Objections to the request were raised by members of the neighboring community and in an effort to alleviate these objections, the applicant undertook “some redesign of the project”. However, this redesign did not include a change to the unit mix to adhere to the one-bedroom limitation within the QAP. The rezoning was approved by the City of El Paso in September 2024.
The timeline described by the applicant indicates that the desire to use the site for affordable housing and subsequent design of the project began before the introduction of the ineligible unit mix provision to the QAP.
According to the applicant, the waiting list for Project Based Voucher (PBV) units in the area surrounding the proposed site (West El Paso) is growing. According to the request submitted, as of February 18, 2025, there are 9,475 people on the waiting list for a one-bedroom PBV unit, 3,416 waiting for a two-bedroom PBV unit, and 1,518 waiting for a three-bedroom PBV unit.
Based on the aforementioned factors and timeline associated with the design of Mesa Hills I, staff recommends that a waiver of §11.101(b)(1)(A)(vii) be granted.