Dandridge Low Income Housing Development To Be Revisited This Thursday

A tax credit housing development that was slotted for the Shrader Road area in Dandridge, adjacent to the Field of Dreams and the new multi million dollar Activity Center investment, hit a bump in the road at last week’s Dandridge Planning Commission Meeting. WODA, an Ohio based Development Company, had appeared before the Planning Commission previously requesting that the Planning Commission approve a concept plan and the designation of a revitalization area. In direct questions, according to a transcript of the meeting recording, a representative of the company denied that the project was low income housing. Upon the receipt of further information, the Commission discovered that the proposed tax credit housing is, by Tennessee Housing Development Agency definition, low income housing. After consulting with the Town of Dandridge Attorney, the Committee was informed that they had the option of rescinding their action if they acted with disingenuous information. The Commission took action and voted 4-2 to rescind the designation of revitalization area, which was pivotal to the developer’s application. They also delayed sending the notification to Tennessee Housing Development Agency until they meet again on Thursday, February 28, 2013.  During the course of the last meeting, the Commission discussed at length the validity of a revitalization designation. That particular designation is important to some low income tax credit developers because it enables them to boost the chances that their application will receive high dollar tax credits. The Tennessee Housing Development Agency assigns points to developers to determine the distribution of the low income housing tax credits. The points are accrued by the developer meeting the threshold in several categories, including proximity to an activity center or park, public transportation and proximity to shopping and medical services. Points are also assigned for a development in a revitalization area.

According to information provided by Patricia Smith of Tennessee Housing Development Agency, documentation is required for developers seeking to qualify with a revitalization designation. The development must be proposed in an area that “contributes to an approved concerted community revitalization plan”. Town of Dandridge Administrator Bryan McCarter stated Monday that Dandridge does not currently have a community revitalization plan. He said that he had checked with contracted planning officials who concurred that no community revitalization plan is in place. Dandridge also has no property zoned Agricultural.

Through email contact, Smith was made aware of statements made in the last Dandridge Planning Commission Meeting concerning the issue being a “wink, wink” issue and a question was submitted regarding a governing body declaring an area a revitalization area for the purpose of helping a developer receive tax credits points. Smith provided a copy of Tennessee Housing Development Low-Income Tax Credit Qualified Allocation Plan to address questions concerning guidelines and general information. Under Miscellaneous Provisions-Part XVI- the QAP states that it is a felony “for any person to knowingly make, utter or publish a false statement” or aid or abet another person in doing such for the purpose of “influencing THDA to allow participation in the Tax Credit Program”.

Other information provided by Tennessee Housing Development Agency includes guidelines for housing applicants which provide that applicants on a current waiting list for housing will be given first priority. Fair Housing guidelines require that applicants are allowed to use government funds, as well as other viable sources of income including disability and social security payments, for the purpose of low income tax credit housing. The question arose during the last meeting about the use of Section 8 funds for rent payments on low income tax credit developments, such as the one proposed by WODA. Smith responded to the inquiry regarding funding options for rent payment.

If this development were to receive low income housing tax credits, there is a requirement that the owner enter into a land use restrictive covenant. The land use restrictive covenant contains language prohibiting the property from excluding Section 8 voucher holders based on the Internal Revenue Code Section 42(h)(6)(B)(iv). So, ultimately, the owners of this development cannot refuse to lease to Section 8 voucher holders. They also cannot refuse to execute and record the land use restrictive covenants because if they do, they cannot actually claim the low income housing tax credits.

The possibility of sharing of the cost of rent between two qualified applicants does not necessarily disqualify the applicants, though some of the selection process is at the discretion of the housing management company.

The Low Income Tax Credit Program, as well as other housing programs sponsored by THDA, is in the spotlight with the Tennessee General Assembly. Bills have been introduced in the House and Senate that would limit any potential benefit that a THDA employee could receive from a developer with interest in THDA programs. The Bills have moved to the Local Government Committee in the House and Senate.