THE TAX CREDIT PROGRAM:

THIS IS THE MOST SUCCESSFUL HOUSING PROGRAM IN THE HISTORY OF THE US.

THE TAX CREDIT PROGRAM IS THE ONLY VEHICLE THAT CAN CREATE A LARGE VOLUME OF NEW AFFORDABLE APARTMENT HOMES. 

3,200,000 AFFORDABLE APARTMENT HOMES CREATED NATIONWIDE

260,000 IN TEXAS

20,000 IN SAN ANTONIO

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OUR FOCUS IS ON THE PRIVATE ACTIVITY BOND/4% TAX CREDIT PROGRAM

THIS IS A FINANCING VEHICLE TO CREATE WORKFORCE HOUSING.

THE BONDS AND TAX CREDITS ARE ISSUED BY THE STATE. 

THE BONDS ARE THE DEBT AND THE SALE OF THE TAX CREDITS PROVIDES THE EQUITY.

NEITHER THE BONDS NOR THE TAX CREDITS ARE THE OBLIGATION OF THE CITY, COUNTY, STATE OR FEDERAL GOVERNMENT.

THE SOLE SECURITY FOR THE BONDS AND TAX CREDITS IS THE PROPERTY.

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HOW THE TAX CREDIT PROGRAM WORKS

THERE IS NO OTHER CITY, COUNTY, STATE OR FEDERAL PROGRAM THAT CREATES JOBS, REVITALIZES AND PROVIDES MODERN, AFFORDABLE, ENERGY EFFICIENT HOMES    AND MAKES MONEY FOR THE CITY.

THE DEVELOPER FINDS THE SITE, DETERMINES ITS VIABILITY, DOES ALL THE DUE DILIGENCE, ARRANGES FINANCING,PUTS UP ALL THE PREDEVELOPMENT COSTS,       ENGAGES THE ARCHITECT, ENGINEER, ETC. BUILDS THE PROPERTY, FILLS IT UP AND HANDS THE OWNER THE KEYS.

THE NEED IN SAN ANTONIO

210,000 VETERANS LIVING IN THE AREA

76,000 RETIRED VETERANS

28,000 VETERANS WITH DISABLITIES

30,000 WOUNDED FROM IRAQ AND AFGHANISTAN, 93% OF WHOM ARE ENLISTED PERSONNEL. 

160,000 FAMILIES IN SUBSTANDARD HOUSING

BENEFITS OF EACH TYPICAL TAX CREDIT COMMUNITY UNDER THIS PROGRAM TO THE SAN ANTONIO HOUSING 

300 NEW, AFFORDABLE, MODERN, ENERGY EFFICIENT HOMES WITH AMENITIES AND SERVICES

$21,000,000 THIRTY YEAR NET CASH FLOW PROJECTION

$250,000 FINANCE CORP BOND ISSUANCE FEE

$1,250,000 DEVELOPER FEE

$22,500,000 TOTAL ECONOMIC BENEFIT TO SAHT

GOVERNMENT ENTITY RECEIVES DEVELOPER FEE PLUS THE ANNUAL NET CASH FLOW.

ALL PREDEVELOPMENT COSTS ARE PAID BY THE DEVELOPER.

ALL FINANCING IS SECURED BY THE DEVELOPER.

ALL CONSTRUCTION GUARANTEES ARE PROVIDED BY THE DEVELOPER.

ALL EQUITY GUARANTEES ARE PROVIDED BY THE DEVELOPER.

ALL DEVELOPMENT SERVICES AND CONSTRUCTION SUPERVISION ARE PROVIDED BY THE DEVELOPER.

ALL MARKETING AND LEASE-UP ARE PROVIDED BY THE DEVELOPER.

ALL MANAGEMENT SERVICES ARE PROVIDED BY THE DEVELOPER'S MANAGEMENT COMPANY.

ALL COMPLIANCE MATTERS ARE HANDLED BY THE DEVELOPER.

ALL RESIDENT SCREENING IS DONE BY THE DEVELOPER.

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MINIMAL RISK TO THE CITY

TYPICAL PREDEVELOPMENT COSTS:

ADVANCED BY DEVELOPER                            ADVANCED BY OWNER

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Architectural and Engineering Design Fees                     $425,000                                                              0.00

Organization                                                                           $25,000                                                               0.00

Building Permits                                                                   $120,000                                                              0.00

Due-Diligence - Appraisal, Market Study, etc.                   $25,000                                                              0.00

Inspection Fee                                                                         $65,000                                                              0.00

Legal                                                                                         $75,000                                                               0.00                                                                                 

Bond Costs and Fees                                                             $90,000                                                               0.00

                                                                                                $825,000                                                               0.00

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TAX CREDIT EQUITY GUARANTEE                                  DEVELOPER                                                          OWNER   

                                                                                          $15,215,042                                                              0.00

 

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THE ECONOMIC IMPACT OF BUILDING 300 TAX CREDIT UNITS IS THE SAME AS 300 MARKET RATE 

THERE HAS BEEN MUCH TALK ABOUT CREATING A "LIVING WAGE." LIVING IN A TAX CREDIT APARTMENT SAVES THE TYPICAL FAMILY ABOUT $10,000/YEAR, THE EQUIVALENT OF A $5/HOUR RAISE TAX FREE. THESE SAVINGS CAN THEN BE USED FOR EXAMPLE FOR EDUCATION OR TO BUY A HOME. 

THE RESIDENT INCOME LEVELS WILL BE SET AT THE PROPERTY AT 60% OF AMI FOR UNDERWRITING. 

THERE IS NO PHYSICAL DIFFERENCE BETWEEN A 30% UNIT AND A 60% UNIT.

A PERSON AT 30% OF AMI CAN LIVE IN A 60% UNIT, BUT A 60% AMI PERSON CAN'T LIVE IN A 30% UNIT IF UNITS ARE RESTRICTED TO LOWER INCOME LEVELS WHEN APPLYING FOR TAX CREDITS, IT MAKES MARKETING AND LEASING LESS FLEXIBLE.

SAHA WILL OWN THE PROPERTY. ONCE IN OPERATION IT CAN SET THE INCOME LIMITS AT ANY LEVEL SO LONG AS THE PROPERTY REMAINS ECONOMICALLY SOUND

THE TAX CREDIT PROGRAM HAS CHANGED SO THAT THE OWNER CAN NOW HAVE UNITS AT 80% OF AMI SO LONG AS THE TOTAL GROSS RENTS DO NOT EXCEED THE REVENUE FROM 100% OF THE UNITS AT 60% OF AMI

THIS NOW ALLOWS SAHA TO SERVE A WIDER PORTION OF THE COMMUNITY WHILE REMAINING 100% AFFORDABLE

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EDUCATING THE NEIGHBORHOODS IS THE WAY TO OVERCOME MISCONCEPTIONS

THE TYPICAL TAX CREDIT PROPERTY IS A $45,000,000 INVESTMENT IN THE COMMUNITY.

BUILDING 300 AFFORDABLE HOMES CREATES 300 GOOD PAYING CONSTRUCTION JOBS, GENERATES $10,000,000 IN PAYROLL, AND PAYS THOUSANDS IN FEES TO STATE AND LOCAL GOVERNMENTS.

THE PROPERTY IS UNDERWRITTEN BY THE STATE, THE LENDER AND THE EQUITY PARTNER.

THE PROPERTY IS BUILT TO THE SAME BUILDING CODES, SPECIFICATIONS AND REGULATIONS AS MARKET RATE DEVELOPMENTS.

THE VAST MAJORITY OF THE RESIDENTS COME FROM THE IMMEDIATE AREA SO THEIR CARS ARE ALREADY IN THE TRAFFIC PATTERN AND THE CHILDREN ARE IN THE SCHOOL SYSTEM.

UNLIKE SINGLE FAMILY NEIGHBORHOODS, AFFORDABLE HOUSING RESIDENTS ARE HEAVILY SCREENED FOR CREDIT AND CRIMINAL BACKGROUND.

THESE ARE GATED COMMUNITIES AND THE RESIDENTS ENJOY EXTENSIVE AMENITIES AND RESIDENT SERVICES IDEAL FOR FAMILIES, SENIORS AND THE DISABLED.

THE HIGH QUALITY OF CONSTRUCTION OF THESE PROPERTIES REVITALIZES NEIGHBORHOODS AND ENCOURAGES TO MAKE CAPITAL IMPROVEMENTS TO COMPETE

THE NUMBER OF RESIDENTS PER UNIT IS STRICTLY CONTROLLED.

THE PROPERTY IS AUDITED AND INSPECTED ANNUALLY BY THE STATE, THE LENDER, AND THE EQUITY PARTNER.

THE PROPERTY MAINTAINS LARGE CAPITAL RESERVES FOR REMODELING AND IMPROVEMENTS.

THUS THE FORECLOSURE RATE FOR TAX CREDIT PROPERTIES IS ONE TENTH THAT OF MARKET RATE.

MULTIFAMILY RESIDENTS HAVE FEWER CARS AND DRIVE FEWER MILES THAN SINGLE FAMILY RESIDENTS.

SINGLE FAMILY RESIDENCES TYPICALLY HAVE THREE TIMES THE NUMBER OF CHILDREN AS MULTIFAMILY UNITS.

THE FASTEST GROWING FAMILY UNIT IN THE USA IS THE SINGLE MOM.

FORTY PERCENT OF ALL THE CHILDREN BORN IN THE USA THIS YEAR WILL BE BORN INTO A HOUSEHOLD WITHOUT A FATHER.

HISTORICALLY THIRTY PERCENT OF THE RESIDENTS ARE SENIOR CITIZENS, AND THAT PERCENTAGE INCREASES EVERY YEAR.

MULTIFAMILY UNITS USE LESS ELECTRICITY AND RESIDENTS USE ONE HALF THE WATER OF SINGLE FAMILY HOMES.

APARTMENT DEVELOPMENTS CONTINUE TO MAINTAIN STREETS AND UTILITIES WHEREAS SINGLE FAMILY DEVELOPERS TURN OVER THEIR STREETS AND UTILITIES TO THE CITY TO MAINTAIN.

NEW APARTMENT COMMUNITIES ARE BETTER DESIGNED, LAST LONGER, REQUIRE LESS MAINTENANCE, HAVE MANY FEATURES AND ARE MORE ENERGY EFFICIENT. THUS, THEY MAINTAIN THEIR VALUE AND APPEARANCE FOR DECADES.

BARRIERS TO AFFORDABLE HOUSING

THE TAX CREDIT PROGRAM REQUIRES A LONG DEVELOPMENT PROCESS AND MARKET RATE DEVELOPERS CAN CLOSE MORE QUICKLY. MARKET RATE DEVELOPERS CAN AFFORD TO PAY MORE AS THEY CAN RAISE RENTS AT ANY TIME AVAILABILITY OF UTILITIES IS LIMITING THE NUMBER OF SITES. SITES MUST BE LOCATED IN A QUALIFIED CENSUS TRACT OR DIFFICULT DEVELOPMENT AREA. 

BUILDING CODES: TAX CREDIT PROPERTIES ARE BUILT TO THE SAME CODES AS MARKET RATE WHICH THEY SHOULD BE, AND AS SUCH IS NOT AN INEQUITABLE CONDITION. 

ZONING: ZONING IS BASED ON MULTIFAMILY UNITS WHETHER MARKET OR AFFORDABLE SO THE ISSUE IS THE OPPOSITION TO AFFORDABLE HOUSING. 

IMPACT FEES: IMPACT FEES ARE WELL OVER $1,000,000 PER PROPERTY. THE CITY OF SAN ANTONIO IS GIVING MILLIONS IN IMPACT FEE WAIVERS TO MARKET RATE PROPERTIES DOWNTOWN. 

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NEIGHBORHOOD AND POLITICAL ISSUES

1. WE DON'T WANT LOW INCOME HOUSING - "LOW INCOME" IS DEFINED AS EIGHTY PERCENT OF AREA MEDIAN FOR A METROPOLITAN AREA. THE AREA MEDIAN INCOME FOR SAN ANTONIO IS $71,000. THEREFORE, ANYONE WHO MAKES LESS THAN $71,000 X .80 = $56,800, OR $28/HOUR IS CLASSIFIED AS LOW INCOME.

2. WE DON’T WANT SECTION 8 HOUSING - EVERY RESIDENCE IN THE UNITED STATES - SINGLE FAMILY, MULTIFAMILY, CONDOMINIUM IS ELIGIBLE TO ACCEPT SECTION 8 (NOW CALLED HOUSING CHOICE) VOUCHERS, BE IT A MILLION DOLAR HIGH RISE.  IN MANHATTAN OR A MANSION IN OLMOS PARK. THERE IS A NEW HOUSING CHOICE PROGRAM CALLED "VASH". THE "V" STANDS FOR VETERANS, AS IT IS DESIGNED FOR MILITARY FAMILIES.THERE ARE NO VOUCHERS CONNECTED TO THE TAX CREDIT PROGRAM.

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/YEAR CAN'T QUALIFY TO OWN A $1,000,000 HOME.

4. WE DON'T WANT SUBSIDIZED HOUSING - ALL RESIDENTIAL PROPERTIES IN TEXAS ARE SUBSIDIZED. HOMEOWNERS HAVE A HOMESTEAD EXEMPTION WHICH REDUCES THEIR PROPERTY TAXES. THERE IS ALSO A SENIOR EXEMPTION. THE INTEREST' PAYMENTS ANE PROPERTY TAXES FOR HOMEOWNERS ON THEIR PRIMARY RESIDENCES, AND EVEN ON 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.

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