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Hutto residents push to keep affordable housing out

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Written by Beth Wade Friday, 09 May 2008

Hutto — Residents of the Hutto Town Square neighborhood on Exchange Boulevard have succeeded in keeping Hutto’s first affordable-housing community out of their backyards.

Colby Denison of Denison Development and Construction had applied for tax credits with the Texas Department of Housing and Community Affairs to build the multifamily, affordable-housing development adjacent to Hutto Town Square.

He withdrew his application May 1. TDHCA, which awards tax credits annually in July, would have announced its decision July 31 had Denison gone forward.

“The application wouldn’t have been competitive,” he said. “I am trying to recoup a small portion of the costs I have in it.” Proposed affordable housing

The issue

Denison had planned to build Hutto Enclave, a 5-acre, 80-unit affordable-housing development on a tract of land owned by Austin resident and developer John Lloyd. Denison first looked at Hutto for this development last September.

“There aren’t any apartments right now in Hutto, and there are no tax credit affordable-housing units in Hutto,” Denison said. “The demand for the type of housing we provide is what attracted me.”

Denison said his housing would have appealed to people in service industries.

“I think what you find is that city employees would live here. People in sales or retail would qualify,” he said. “If my project doesn’t go forward, the people who work in the retail that is coming to Hutto will probably have to commute from one of the neighboring communities to find an affordable place to live.”

Citizen reaction

Hutto Town Square residents formed the Hutto Community Action Group in February in reaction to the news.

“We are not against low-income people. It is just the idea that this isn’t the right place to build the development,” HCAG member Brandon Hodge said. “There are towns where they have the infrastructure and the need and it makes a lot of sense to put that money there. It just doesn’t make sense here in Hutto right now.”

The group worked with the city to prevent Denison from building in Hutto. The council voted 6 to 1 against the development at a Feb. 7 meeting, where community members spoke against it.

“My immediate reaction was, ‘Why are they looking at Hutto?’” Mayor Pro Tem Debbie Holland said. “I had never thought about low-income housing in Hutto.”

The city had not previously considered a policy on low-income housing, but plans to work on one before next year’s application process begins in January, Holland said.

The development could have moved forward without the city’s approval.

Support and opposition

During the tax-credit application process, applicants earn or lose points based on the amount of support or opposition from recognized representatives or groups such as homeowner associations, said Gordon Anderson, TDHCA spokesman.

Hutto Enclave received a letter of support from State Rep. Mike Krusee. The HCAG, along with the help of city manager Ed Broussard, contacted Krusee’s office to have the letter rescinded. Before Krusee could rescind it, Denison withdrew the application.

Mayor Ken Love and Broussard wrote two letters against the project, citing the city’s lack of social services, infrastructure, a grocery store and close proximity to a hospital.

On Feb. 22, Lloyd sent a letter from the Hutto Exchange TS Neighborhood Association to the TDHCA in support of Hutto Enclave. Hodge said the Hutto Town Square HOA never voted to join Lloyd’s association.

“[The Hutto Town Square HOA] encompasses the single-family lots. [The Hutto Exchange TS Neighborhood Association] was going to encompass the multifamily land because [Colby Denison] was only buying a piece of the multifamily land,” Lloyd said in a phone interview. “We had a different association and were going to give the homeowners association a seat on the multifamily association, which I thought was a pretty good idea. There was such a hew and outcry that I decided it wasn’t worth the effort. That means that everybody that works in a service job won’t be able to live in Hutto, which is stupid to me.”

The letter written from Lloyd to the state was rescinded.

With no support from the community or its officials, Denison said the project had no chance of succeeding. He could potentially apply again next year for tax credits and is not ruling out the possibility of affordable housing for seniors in Hutto.

“This is the best thing for the neighborhood and for those who really do need the services of a low-income property,” HGAC member Andrew Baker said. “This would have been the wrong place for that property to have been developed, and they would have been under served in this location. So, it is a victory for everybody.”

The next step

Members of the HCAG would like to see the land’s zoning changed from multifamily to single family, but the city cannot discuss the issue without a request from Lloyd.

“Do we want a three-story apartment there? Of course not,” Hodge said. “If we had our way, there would be other houses, but we can’t force them to do that. Maybe they will change the zoning.”

The HCAG will continue meeting to avoid similar situations in the future. Members of the group living in Hutto Town Square want to strengthen the homeowners association as well, Baker said.

“I am beyond proud of our neighborhood that we pulled together for a common cause, were able to be on the same page about the issue and took some organized measured steps that would benefit the neighborhood,” he said.

TDHCA Overview

Started: 1986
First tax credits: 1987
Purpose: The TDHCA receives its authority to award tax credits to developers from the U.S. Treasury Department.
The program targets families at or below 60 percent of the Area Median Income. The program encourages developers to build or preserve rental housing for low-income families, involve for-profit companies and nonprofit organizations, add to the state’s housing supply and prevent losses in affordable housing.
The TDHCA takes measures to ensure that large urban populations and rural areas have an equal opportunity to receive tax credits.
- Applications accepted in January
- Tax credits awarded July 31

Source: www.tdhca.state.tx.us

How TDHCA awards tax credits to developers

When a developer decides to build affordable housing, he might apply for tax credits through the Texas Department of Housing and Community Affairs to help finance the project, rather than take out a loan. This program is intended to cover about 70 percent of the total cost.
The developer starts with a pre-application, which contains a self-scored rating system. If he scores high enough, he will complete a full application.
Full applications are rated annually by the TDHCA on a point scale with a maximum of 228 points. Each application must receive a minimum of 111 to be considered. Developers compete against each other for a limited amount of credits.
Points are added or subtracted based on support or opposition from recognized neighborhood groups and elected officials as well as the financial feasibility of the development, the amount of income-level-restricted apartments, the rent restrictions, the cost of the development per square foot, etc. A full list of requirements and scores can be found at www.tdhca.state.tx.us/multifamily/htc/docs/08-QAP.pdf.
If the TDHCA awards the developer tax credits, he will sell them to an investment partner. The investor will get a tax break on his federal income taxes.
By avoiding a full loan that would accrue interest, the developer has the capital to build his multifamily development and keep rent low.

Source: Gordon Anderson, TDHCA spokesman

Affordable-housing program requirements and income limits

Williamson County’s Area Median Income is $69,100 for a family of four. The income limits are then determined on a sliding scale for individuals up to families of eight.

The Hutto Enclave, a proposed affordable-housing development, would have included apartments for persons making 30, 50 and 60 percent of Williamson County’s AMI.

To qualify for affordable housing, residents must: