Tuesday, January 30, 2018

Affordable Housing Options and Pitfalls, part 5

Is McKinney Winging it Again?
McKinney accepts federal funds, so McKinney must comply with certain HUD regulations and requirements to receive funding for the CDBG program (just to name one). Between 2008 and 2012, McKinney, Frisco, many other cities, and the TDHCA were sued by Inclusive Communities Project (ICP) because ICP said they all promoted concentrations of low-income people in low-income areas. McKinney's issue was that the majority of low-income housing was on the east-side, which ICP considered to be a violation of the Fair Housing Act.

Somehow the burden of correcting the situation landed on the McKinney Housing Authority (MHA). The MHA put out a Request for Qualifications for high opportunity areas (low-poverty and good schools) in McKinney. This effort resulted in MHA putting two 9% HTC  apartments on McKinney Ranch Parkway, on the west-side of McKinney. They were rushed in to satisfy the legal agreement. Since then, there have been several application for west-side HTCs that ended up going nowhere. There are various reasons HTC applications are either pulled or not given enough points. Land deals and financing fall through. Developers change their minds.

Meanwhile, after TDHCA's issues with ICP, the TDHCA changed their system for awarding HTCs by giving more points for 9% HTC applications that were going into high opportunity areas. The TDHCA also focused on "De-Concentration Factors" to prevent too many LIHTC tax credit awards in areas deemed oversaturated. This is how the limitations on developments in certain census tracts came about. And, it is important because McKinney's largest east-side census tracts is now considered oversaturated with more than 20% HTCs per total households. The full over 20% HTC rule reads:
“(e) Limitations on Developments in Certain Census Tracts. An Application that proposes the New Construction or Adaptive Reuse of a Development proposed to be located in a census tract that has more than 20 percent Housing Tax Credit Units per total households as established by the 5-year American Community Survey shall be considered ineligible unless the Governing Body of the appropriate municipality or county containing the Development has, by vote, specifically allowed the Development and submits to the Department a resolution stating the proposed Development is consistent with the jurisdiction’s obligation to affirmatively further fair housing. The resolution must be submitted by the Full Application Delivery Date as identified in §11.2 of this chapter or Resolutions Delivery Date in §10.4 of this title, as applicable.”
In 2016, McKinney created a Concerted Revitalization Plan (CRP) to ensure that the TDHCA would award funding for the redevelopments of three, very old McKinney Housing Authority properties on the east-side, even though they were on the east-side. McKinney was concerned enough about the concentration issues and TDHCA rules that discouraged them, to develop a CRP. Below is a statement from a city official about the purpose of the CRP, according to McKinneyonline.com:
“The Community Revitalization Plan is a city sponsored plan for the revitalization of the McKinney Housing Authority Properties. The plan allows the housing authority to bring greater outside equity to the redevelopment to the three remaining properties on the east side of McKinney – Merritt Homes, Cockrell and Lloyd-Owens,” said Janay Tieken, Housing and Community Development Manager.
Today, has the situation in McKinney improved? Have we de-concentrated the east-side or done anything to prevent even higher concentrations? According to the new 2018 TDHCA calculations, census tract 309 (the largest one on the east-side) has 34.34% HTCs per total householdsover 14.34% more than TDHCA limitations allow. From email communication with the person who runs TDHCA's numbers, the rule was revised to add cities with over 100,000 on this list. The screen shot is below. 

The east-side of McKinney is the only census tract in all of Collin county to be put on this list. Plano doesn't even have the concentration overage of McKinney. If McKinney wants to put in any more HTC units on census tract 309, City Council must pass a resolution stating the development is within the city's obligation to affirmatively further fair housing. Is McKinney willing to prove they are meeting their obligations if the federal government disagrees? Is McKinney unconcerned that we're the only city in Collin county with such a high concentration of HTC properties in one area?

Currently, McKinney is working with an LIHTC developer to add over 200 more HTC units to the oversaturated east-side census tract 309 (the Sphinx Throckmorton project). It is very possible that McKinney could come back and say that the Concerted Revitalization Plan can be stretched to justify adding a new development (and not just the three McKinney Housing Authority redevelopment properties as we were told in 2016). It would be a stretch, for sure. 

When City Council voted on the Concerted Revitalization Plan on 1/17/17, the agenda item on Legistar stated the intent of the resolution was to redevelop MHA properties. Additionally, the Concerted Revitalization Plan discussed all three of the MHA properties specifically in relation to utilizing the LIHTC program to help finance their rebuilding.
17-065 Consider/Discuss/Act on a Resolution Approving the Concerted Revitalization Plan to Assist in the Redevelopment of McKinney Housing Authority Properties 
Even though the east-side does need more of these types of living units, the federal government has been making an effort to stop concentrating low-income housing in low-income areas for well over 10 years. All their programs promote high opportunity, low-poverty HTC development areas, and their programs discourage high-poverty, low-opportunity areas. 

From looking at what has happened since the original lawsuit, there doesn't seem to be any sort of coordinated, big picture plan going on as far as how many HTC units should be built, where they should be built, or whether we should rush to rubber stamp or plan ahead for the right ones. 

On the other hand, maybe McKinney doesn't need a coordinated plan. According to McKinney's numbers, we have a very high percentage of LIHTC units compared to other cities in our county. We have double the amount of Plano. Again, all of this is worth discussion. 

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