What is “affordable housing” or “low income housing” or "tax credit housing?”

 

1. We don’t want low income housing. “Low income” is defined as eighty percent of area median income. The area median income for San Antonio is $71,000, so anyone making $56,800 or less is classified as low income.

2. We don’t want Section 8 housing. EVERY residence in the United States – single family, multifamily, condominium - is Section 8 housing, be it a million dollar high rise in Manhattan, or a mansion in Alamo Heights. ANY residence can accept Section 8 vouchers.

3. We don’t want “income restricted housing.” EVERY residence in the United States is income restricted. Everyone has to income qualify to purchase or rent a residence. An individual making $100,000 per year cannot qualify to get financing to purchase a million dollar home. A person earning $50,000/year can’t afford to pay $2,000/month in rent.

4. Tax credit properties are subsidized. ALL residential properties in Texas are subsidized. Homeowners have a homestead exemption which reduces their property taxes. The interest payments and property taxes on their primary residences, and even their second homes, are tax deductible. Renters get no such subsidy. Market rate apartment owners deduct property taxes, expenses, depreciation, and interest payments from their income taxes.  

5. We don’t want low income people living in our area. It was always thought that anyone who has a job and has never committed a crime should be able to live anywhere in the United States.

   1. The average Social Security payment is $1,422/month, $17,064/year. The absolute maximum benefit is $2,861/month, $34,332/year, far below the definition of low income.  

   2. Veterans who are 50% disabled with a spouse and child are paid $1,026/month, $12,312/year. At 100% disability it increases to $3,352/month, $40,224/year. Again, far below the low income classification.

   3. Who has the authority to decide who is allowed to live where? How much does a person have to earn before they can live anywhere? Can they be excluded from a neighborhood? A census tract? A city council district? A state representative’s district? Is there a committee, or can one person declare a person not welcome? Is it just for renters? How about wounded veterans who are given homes mortgage free? Can they be told they can only live in certain neighborhoods due to income restrictions? Is it only renters, or homeowners as well? Is it only apartment dwellers, or does it include those who rent single family homes? Does the homeowner who loses his job or has his hours reduced have to sell his home and move away?  Does a senior citizen have to move out of the neighborhood after they retire? 

   4. The vast majority of the Majestic Ranch residents will come from the immediate area, so their children are already in the school system, and their cars are already in the traffic pattern.

6. Affordable housing is built using private activity bonds and tax credits. These tax free bonds are allocated by the federal government to each state by population, and the state allocates a portion to affordable housing. Neither the bonds nor the tax credits are the obligation of the city, county, state or federal government. The sole security for the financing is the property.

   1. The bonds are allocated by the Texas Department of Housing and Community Affairs, and sold on the open market. The property can then receive 4% of its qualified costs (hard construction costs, general contractor fee, etc.) per year for ten years, in the form of tax credits. The tax credits are sold on the open market, which creates the equity for the project. For example, a project that had $20mm in qualified costs would generate $20mm x 4% x 10 years = $8,000,000 in tax credits.

7. THERE ARE NO SUBSIDIZED RENTS OR VOUCHERS CONNECTED WITH THE TAX CREDIT PROGRAM.

   1. The tax credit program was created by President Reagan in 1987 through the Internal Revenue Code as a financing structure for building housing for America’s workforce. It is a debt/equity structure to construct and rehabilitate apartments. It is not an individual rent voucher system.

   2. This is the most successful housing program in the history of the United States. Due to extensive regulation and oversight, the foreclosure rate for tax credit communities is one tenth that for market rate multifamily properties.

   3. This program is designed to provide safe, modern, affordable, energy efficient homes for working families and senior citizens. These are auto mechanics, sales clerks, lab technicians, bank tellers, hair dressers, part time students.

   4. By contrast, Section 8, which is now Housing Choice, is a HUD program whereby individual applicants receive vouchers they can use to rent any residential property, including single family homes. It is not associated in any way with the tax credit program.

8. Unlike market rate apartments, by law tax credit communities are heavily regulated throughout their existence.

   1. The owner must submit annual audited financial statements.

   2. The property must maintain substantial capital reserves.

   3. Residents must pass credit and criminal background checks. Residents must be able to pay their rent, and no persons who have committed crimes against persons or property are permitted to live in this development. (Unlike single family homes, where any homeowner can rent to anyone.)

   4. The number of residents per unit is also regulated.

   5. These communities undergo rigorous annual physical inspections by Texas Department of Housing and Community Affairs, as well as the lender and equity partner.

9. The demand for these units is overwhelming. Citywide San Antonio it is estimated at over 160,000 families. All of the tax credit properties managed by HomeSpring Residential Services are 95%+ occupancy.

10. The fastest growing family unit in the United States is the single mom. These gated communities provide recreational and learning facilities, as well as resident services, for these families.

11. The benefits of tax credit communities are many:

    1. They create jobs. Each tax credit development of 300 units creates 300 quality construction jobs and generate $10,000,000 in payroll.

    2. They revitalize the neighborhood.

    3. They bring customers to local businesses. This is three hundred new working families to patronize restaurants, auto repair shops, dry cleaners, barbers, beauty shops, convenience stores.

    4. They bring more businesses and employers to the area.

12. Much talk has been made about providing a “living wage.” The average family of four will save $10,000/year in rent, which is the equivalent of a $5/hour raise, tax free, which can be used to save for education or to buy a home.

13. Majestic Ranch Apartments will be a $46 million investment, 288 new, modern, energy efficient, safe, affordable homes for working families, senior citizens, and veterans.

14. Majestic Ranch Apartments will be owned by the San Antonio Housing Authority, not a private entity. SAHA will have control over who lives in the property.

15. SAHA is held to the same strict building standards and resident qualifications as any tax credit property owner.

16. SAHA will benefit both financially by the ownership of the property, and furthering its mission of providing modern, affordable housing to the citizens of San Antonio.

17. HomeSpring Realty Partners, as developer, will employ the latest innovations in design and construction, utilizing high quality, low maintenance, energy efficient building materials, which reduce operating costs, and maintain the value of the property throughout its existence.  All this translates into greater safety, lower cost, and residences that will be beautiful homes for working families which will maintain their value for years to come.

18. Extensive unit amenities include attractive floor plans, nine foot ceilings, exterior storage, fire sprinklers in all rooms, central heat and air, energy-efficient appliances, frost-free refrigerators with ice makers, washer-dryer connections, high-speed internet access in all rooms, microwave ovens, balconies and patios, ceiling fixtures in all rooms, walk-in closets, individual hot water heaters, dishwashers, and manufactured hardwood floors.

19. The common area features will consist of covered entries, a handicapped accessible exercise and rehabilitation facility, children’s playscapes, a large wheelchair accessible pool, a gazebo with picnic tables and barbecue grills, clubhouse, sports court, community laundry rooms, perimeter fence and limited access gates, covered parking, furnished community room, service coordinator office, and health screening room.

20. Affordable housing communities have drawn an enormous amount of interest from senior citizens.  Thirty percent of HomeSpring’s tax credit management portfolio consists of senior residents. Many tax credit communities are infill developments which allow senior citizens to sell their dwelling and move into large, safe, energy efficient homes in the same neighborhood where their families grew up, shopped, went to school and church. We anticipate many local senior citizens will take advantage of Majestic Ranch.

21. According to the Veteran’s Administration, there are 210,000 veterans living in the San Antonio area, and 76,000 of those are retired. San Antonio is also home to 60% of all the wounded returning home from Iraq and Afghanistan, some 30,000 men and women. Ninety three percent of those wounded are enlisted personnel.

    1. Majestic Ranch will be heavily marketed to over fifty veterans organizations,  and senior citizens, as well as disabled military personnel and civilians. The property will have many features such as the pool and exercise facility designed for the disabled. The property will create quality, safe, affordable housing and recreational facilities to ease the soldier’s transition back into civilian life.

    2. There will also be extensive resident services.

22. Who are the people who qualify to live in tax credit properties? According to CareerBuilder.com, here are some median salaries for various jobs:

    1. Salary range: $20,000-$29,999

       1. 1. Personal home and care aides: $20,280

       2. 2. Manicurists and pedicurists: $22,150

       3. 3. Funeral attendants: $23,880

       4. 4. Landscaping and groundskeeping workers: $25,340

       5. 5. Dietetic technicians: $28,530

    2. Salary range: $30,000-$39,999

       1. 1. Veterinary technologists and technicians: $30,580

       2. 2. Travel agents: $32,450

       3. 3. Dental assistants: $34,000

       4. 4. Police, fire and ambulance dispatchers: $36,470

       5. 5. Massage therapists: $39,780

    3. Salary range: $40,000-$49,999

       1. 1. Surgical technologists: $40,710

       2. 2. Law clerks: $41,960

       3. 3. Flight attendants: $43,350

       4. 4. Firefighters: $47,270

       5. 5. Health educators: $49,060

    4. Here is a small sample of those positions whose median income according to Salary.com is under $30,000:

       1. Ambulance Driver: $28,602

       2. Admitting Clerk: $29,349

       3. Billing Machine Operator: $29,170

       4. Barber: $28,557

       5. Bus Driver: $19,545

       6. Cashier - Grocery Store: $27,659

       7. Call Center Representative: $29,325.

       8. Certified Medication Technician: $27,580

       9. Certified Nursing Assistant - Long-Term Care: $27,326.

       10. Claims Processing Clerk: $26,554.

       11. Lifestyle Coach

       12. Foster Care Specialist

       13. Customer Service Representative

       14. Legal File Clerk

       15. Cashier

       16. Regional Medicare/Medicaid Specialist

       17. Night Stocker

       18. Internet Sales Specialist

       19. Hotel Reservations Manager

       20. Medical Records Administrative Specialist

       21. Resource Management Assistant

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