With several thousand applicants waiting to receive rental assistance from the Plano Housing Authority, local developers are taking advantage of state tax credits to build affordable housing to help meet those needs.

Affordable housing in Plano has been a hot topic of discussion that is likely to continue among local leaders, Plano Planning Director Christina Day said. This is in part due to mixed-use developments like Legacy West coming online as well as continued economic growth and regional efforts to enhance mobility and shorten commute times, she said.

“Think about how many new jobs [will be] at Legacy West and how many floors there are to sweep and how many tables there are to bus. There’s a demand,” Day said. “There are a lot of lower wage jobs there and there is a big demand for service industry workers. Yet, where do those people live?”

In a 5-4 ruling last June, the U.S. Supreme Court upheld the Fair Housing Act of 1968 in a suit filed by Dallas-based Inclusive Communities Project against the Texas Department of Housing and Community Affairs. The lawsuit challenged the way the agency had disproportionately provided tax credits to developers for low-income housing in low-income neighborhoods rather than in the Dallas suburbs. Although the TDHCA’s practices were deemed unintentional, the Supreme Court considered its discriminative impact illegal.

The result can be seen locally through a slight increase in the number of requests to the Plano City Council for resolutions of support from developers wishing to apply for these 9 percent state housing tax credits. The Plano City Council approved four requests for support at a regular Jan. 11 meeting, compared to two resolutions presented to the council in 2015 and one in 2014.

City approval processes

Information on the number of affordable housing units in a proposed development is typically shared with the Planning and Zoning Commission and the council, but the city by law cannot deny a development based exclusively on its housing mix, Plano City Council Member Rick Grady said. Metrics used to determine if a multifamily development should be approved or denied instead hinges on whether the land is zoned residential, if the location is appropriate for residential use, and if the development falls within the guidelines of the city’s comprehensive plan.

“Market forces, economic forces and zoning case discussions are appropriate ways for cities to manage land use,” said Grady, who previously served as chairman of the P&Z Commission.

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Where to build

The 9 percent housing tax credit is highly competitive, and applicants are evaluated on a number of criteria before being awarded the credit, according to the TDHCA. Developers who are approved benefit by offsetting their federal tax liability, TDHCA spokesperson Gordon Anderson said.

Developers whose project applications include resolutions of support from a municipality or an elected official can increase their chances of being granted the credit, according to the TDHCA website. Applicants also typically look to build in high opportunity areas that qualify for other additional scoring incentives, such as those served by highly rated school systems, Anderson said. However, Anderson would not comment on the increase in resolutions of support in Plano and its potential connection to the Supreme Court ruling.

“TDHCA is not aware of any correlation between the Supreme Court ruling … and any increase in the number of requests to the City Council for resolutions of support from local developers applying for 9 percent tax credits,” he said.

Applications are scored and ranked within their region or set-aside and in accordance with rules and laws outlined in the TDHCA’s Qualified Allocation Plan. Scoring criteria ranges from the size of the units to rent levels and location. Applicants can also receive 17 points for receiving a resolution of support from a municipality, according to the agency’s 2016 QAP.

Anderson said the TDHCA does not provide significant scoring incentives for developing in these high opportunity areas. However, the agency has identified such areas to exist throughout Plano partly for its favorable school district, Day said. These high opportunity areas are where developers hope to attract more working-class families.

Housing choice vouchers

While developers can receive financial assistance for building affordable housing, local agencies like the Plano Housing Authority provide rental assistance for low-income families in Plano and throughout the North Texas region.

The authority, which has been in operation since 1952, issues housing choice vouchers (formerly known as Section 8) through the U.S. Department of Housing and Urban Development. Its coverage area consists of a 25-mile radius around Plano.

The Housing Choice Voucher Program and housing tax credits work together to create affordable housing for families, senior citizens, veterans and those with disabilities, said Earnest Burke, executive director for the Plano Housing Authority.

“Many people don’t realize this, but the average person is probably two or three paychecks away from being in the position where they don’t have the means to sustain themselves,” he said. “The need is there and we help a lot of people get back on their feet. A lot of them don’t stay [in] the program once we get them back to the point of sustainability.”

Another way nonprofits like the Plano Housing Authority and some builders are working to avoid discrimination is by encouraging developments that incorporate a 50/50 mix of affordable and market rate units. This balance has proven more effective for transitioning low-income families off of government assistance, said Jean Brown, executive director of the Plano Housing Corporation. The organization is known for incorporating these best-practice ratios. It is also the city’s housing development corporation and is partially funded by federal funds funneled through the city.

Although the amount of funding a developer gets in housing tax credits is based partially on the number of affordable units allocated to the development, incorporating a 50/50 mix of affordable and market rate units can supply the housing demand without stifling opportunities for advancement for low-income families, Brown said.

“When you have a development that is almost 100 percent affordable, you’re condensing poverty. When you condense low-income families, they don’t get that upward mobility [that they need].”

Best practices should be achieved through community-based organizations in order to decrease a city’s dependency on federal funds, she said.

“There are very few affordable home ownership opportunities [in Plano] and very little, if any, decent rental housing,” Brown said. “Investors are buying up [homes] before homeowners can get to them and that can increase the prices.”

Another way to supply the demand for affordable housing lies in taking advantage of the city’s existing housing stock. City programs help maintain Plano’s older homes in order for residents of all income levels to live in Plano, Day said.

“We want our neighborhoods to remain healthy and we want property values to remain steady,” Day said. “At  the same time, if you have too much gentrification essentially you end up with things that people can’t afford in neighborhoods that maybe were once more of a workforce housing neighborhood.

“If it gets too hot, you end up pricing people out of the market,” she said.