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Presentation, discussion, and possible action regarding a Material Amendment to the Housing Tax Credit Application for Regency Lofts (HTC #20097)
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RECOMMENDED ACTION
recommendation
WHEREAS, Regency Lofts (Development) received an award of 9% Housing Tax Credits (HTCs) in 2020 for the new construction of 120 multifamily units, of which 102 are low-income units, in Houston, Harris County;
WHEREAS, DWR Regency 20, LP (Development Owner or Owner) requests approval for a change in the unit mix, resulting in an increase in the number of one-bedroom units from 47 to 48 units, and a decrease in the number of two-bedroom units from 61 to 60 units, while maintaining the total number of units at 120;
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 Owner 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 does not impact the viability of the transaction;
NOW, therefore, it is hereby
RESOLVED, that the requested material amendment to the Application for Regency Lofts 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
Regency Lofts received an award of 9% Housing Tax Credits in 2020 for the new construction of 120 multifamily units, of which 102 are low-income units, in Houston, Harris County. The Development is complete, and all buildings were placed in service in 2022. During the review of the cost certification, it was discovered that there was a change to the original bedroom mix represented at Application. The Development was originally proposed with 47 one-bedroom units and 61 two-bedroom units, in addition to 12 three-bedroom units. However, the cost certification revealed that, although the overall number of units and income restrictions did not change, the Development contains one additional one-bedroom and one less two-bedroom unit. This change to the bedroom mix also results in an overall decrease of 243 square feet, or 0.22%, in the Net Rentable Area (NRA), going from 108,351 to 108,108 square feet.
In a letter dated May 15, 2024, the Owner’s representative, Donna W. Rickenbacker, requested approval for the material modification of the bedroom mix. Ms. Rickenbacker states that the design adjustments were made to accommodate expanded detention conditions for flood mitigation required by the City of Houston. The modification did not alter the square footage of the unit types.
The 0.22% decrease to the NRA is considered a Notification Item under 10 TAC §10.405(a)(2)(C), but is mentioned as part of the material amendment to bedroom mix of units that requires approval by the Board under Tex. Gov’t Code §2306.6712(d)(2) and 10 TAC §10.405(a)(4)(B). Additionally, it should be pointed out that at Application the Engineer/Architect Certification identified 6,992 square of common area. At cost certification, 6,246 feet of common area were identified by the architect, and when questioned about it, the Owner explained that the 6,992 figure included the maintenance room of 494 square feet according to the architectural drawings, and this was due to the description for common area on the certification form. Therefore, if the square footage for the maintenance room is removed, the reduction in common area is less than the 3% threshold for material amendments.
Staff has determined that the proposed changes would not have affected the Development in a negative manner and would not have impacted the scoring of the Application or the HTC award. Staff has conducted an analysis of the cost certification and has determined that the Development remains feasible with the changes to the bedroom mix. The final recommended HTC amount will be determined upon finalization of the cost certification review.
Staff recommends approval of the requested material amendment to the Application.