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Home My WebLink About10/24/2007 - STAFF REPORTS - 2.C.�FpALM gp iy c U N C��/oxnY«'Y'W 4</FORa1 r7rIVI�•emne TM OW2111YA City Council Staff Report �K•�ary�arrea��atr7aa SUBJECT. SUPPORT REGULATORY CHANGES TO THE LOW INCOME HOUSING TAX CREDIT (LIHTC) PROGRAM SO AS TO ALIGN THE CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE (TCAC) FUNDING DISTRIBUTION WITH THE REGIONAL HOUSING NEEDS ASSESSMENT (RHNA) REQUIREMENTS FOR THE PRODUCTION OF AFFORDABLE HOUSING. FROM. David H. Ready, City Manager BY- Department of Community & Economic Development SUMMARY This action is to join with the County of Riverside and Coachella Valley Association of Governments (CVAG) in support of regulatory changes to the Low Income Housing Tax Credit (LIHTC) Program which will create consistency with the Regional Housing Needs Assessment (RHNA) process. d:10101 ILLil:110U7.49[001 Approve Resolution No. Supporting Regulatory Changes to the Low Income Housing Tax Credit Program Creating Consistency with the Regional Housing Needs Assessment process. STAFF ANALYSIS: The California Tax Credit Allocation Committee (TCAC) provides allocation of low income housing tax credits to ten established geographic regions in the State. Riverside, San Bernardino and Imperial Counties are combined to represent one region, known as the Inland Empire region. The Inland Empire region's combined population is 11.5% of the State's population. Unfortunately, the percentage of low income housing tax credits assigned to this region is only 8%. At the same time, the Regional Housing Needs Assessment (RHNA) process, created by the California Department of Housing and Community Development and administered in Southern California by the Southern California Association of Governments (SCAG), assigns the responsibility to Riverside and San Bernardino counties to build the highest per capita quantity of affordable housing in Southern California. ITEM NO. I f. -- The RHNA and LIHTC allocations are in direct contradiction to each other, as Riverside and San Bernardino Counties are forced to build affordable housing, but there are not sufficient low income housing tax credits to help with the funding needed to build this housing. The LIHTC program is one of the most effective ways to produce affordable housing, especially for very -low and extremely -low households. Typically such projects cannot support more than a minimal amount of debt. This Resolution will urge local legislators to support changes to the Low Income Housing Tax Credit Program to balance the allocation of tax credits with the RHNA requirements for the production of affordable housing. FISCAL IMPACT: There is no direct fiscal impact to the General Fund. MORN i RAYMOND ect horrof CWmunity &Economic Development DALE E. COOK, JR. Community Development Administrator %J ':th\ THOMAS J. W1rf 86N DAVID H. READY Assistant City Manager — Development Services City Manager ATTACHMENT: 1. Resolution 2 DaleC\Housing\CC_StaffReport_LI HM OW7 002 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS SUPPORTING REGULATORY CHANGES TO THE LOW INCOME HOUSING TAX CREDIT PROGRAM CREATING CONSISTENCY WITH THE REGIONAL HOUSING NEEDS ASSESSMENT PROCESS WHEREAS, the California Tax Credit Allocation Committee (TCAC) has established ten (10) geographic regions and allocated a percentage of available low income housing tax credits to each region; and WHEREAS, the counties of Riverside, San Bernardino and Imperial are grouped together to form one of the ten regions defined as the Inland Empire region; and WHEREAS, the current Inland Empire population is 4,186,436 residents; and WHEREAS, the Inland Empire regional population represents 11.5% of the current statewide population; and WHEREAS, the Inland Empire region receives only 8% of the geographic Low Income Housing Tax Credit (LIHTC); and WHEREAS, the current regulations of the LIHTC Program unjustly disadvantage the Inland Empire region with a disproportionate allocation of low income housing tax credits by geographic areas; and WHEREAS, the United States Census ranks Riverside County with the greatest numerical increase in population over the past six years; and WHEREAS, the United States Census ranks Riverside County as within the top 100 fastest growing counties nationwide and with the greatest numerical increase in population of the same 100 fastest growing counties; and WHEREAS, every other county in the State of California with a current population of 2,000,000 or more has a geographic region of its own; and WHEREAS, the United States Census estimates the current Riverside County population to be 2,023,803 as of July 1, 2006; and WHEREAS, the current regulations of the Low Income Housing Tax Credit Program unjustly disadvantage Riverside County by grouping it within the Inland Empire region creating competition for the already disproportionately low allocation to the Inland Empire region; and 003 Resolution No. _ Page 2 of 2 Pages WHEREAS, Regional Housing Needs Assessment (RHNA) obligates Riverside and San Bernardino counties to build the highest per capita quantity of affordable housing in Southern California; and WHEREAS, RHNA projects housing demand based on forecasted population growth within a housing element planning period, while the California Tax Credit Allocation Committee (TCAC) assigns tax credits based on existing concentration of poverty; and WHEREAS, the RHNA housing production obligation and the Low Income Housing Tax Credit Program allocation formula work in contradiction with each other; and WHEREAS, the Riverside County wishes to effect compliance with the RHNA housing production obligation; and WHEREAS, the Low Income Housing Tax Credit Program is the most viable source of primary funding for the production of affordable housing; and WHEREAS, the City urges local and state legislators to also support regulatory changes to the Low Income Housing Tax Credit Program so as to align the allocation of Low Income Housing Tax Credits with the RHNA requirements for the production of affordable housing. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE TO SUPPORT REGULATORY CHANGES TO THE LOW INCOME HOUSING TAX CREDIT PROGRAM SO AS TO ALIGN THE ALLOCATION OF LOW INCOME HOUSING TAX CREDITS WITH THE RHNA REQUIREMENTS FOR THE PRODUCTION OF AFFORDABLE HOUSING. ADOPTED this 241h day of October, 2007 David H. Ready, City Manager ATTEST: James Thompson, City Clerk m Resolution No. _ Page 3 of 3 Pages CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE) ss. CITY OF PALM SPRINGS) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. _ is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California DaleClHousing\CC_Resolution_LI HM OCW 005