1. Housing Credits What is a Housing Credit? Volume cap ($1.75 per capita per year, currently $29,248,010) Program requirements –Income and rent restrictions –Length of set aside 9% and 4% credits Competition QAP

2. Housing Credit Syndication Tax credit received annually for 10 years Requires entity with tax liability to join partnership For profit limited partnership formed Developer (for profit or non-profit) is general partner with.01% ownership Investor(s) with tax liability become limited partners with 99.99% ownership 99.99% of tax credits flow to limited partners, who pay funds up front in exchange for 10 years of tax credits

3. Tax Credit Calculation Net Equity = Eligible basis (project cost less land and other ineligible items such as federal funds) xDDA/QCT factor (130%) XCredit rate (9% or 4%) X% Low Income Units X10 (number of years credit granted) X99.99% (% sold) XCurrent syndication rate

4. 9% Tax Credit Example $11,000,000 total project cost $1,000,000 land and other ineligible costs Not located in QCT 90% low income $10,000,000 eligible basis X8.01% (current 9% credit rate) X90% low income = $720,900 annually X 10 years X$0.80 syndication rate X99.99%=$5,766,623 (52% of cost)

5. Bonds for Rental Housing Bond volume cap ($75 per capita per year, currently $1,253,486,175 - not all housing) Loan program Credit enhancement Private placement Difficulty of program Expensive cost of issuance Automatic 4% tax credits (50% test)

6. 4% Tax Credit Example $11,000,000 total project cost $1,000,000 land and other ineligible costs Not located in QCT 90% low income $10,000,000 eligible basis X3.43% (current 4% credit rate) X90% low income = $308,700 annually X10 years X$0.82 (syndication rate) X99.99%=$2,531,087 (23% of cost)

7. Other Programs HOME CDBG Federal Home Loan Bank Essential function bonds 501c3 bonds CRA SHIP SAIL Section 8 PHA Capital Funds Property tax exemption

8. Today’s Challenges Astronomical insurance costs High real estate taxes No annual rent increases Utility costs increasing Lack of suitable, affordable land Minimal opportunities for additional subsidy

9. What Local Government Can Do: Provide significant financial incentives Recognize more subsidy per deal may be required; which may mean less overall production Waive fees (especially school board) Consider tax exemption

10. What Local Government Can Do: Combat NIMBYism Shorten permitting time frames Align funding cycles (i.e., County HOME program) Work with the municipalities within Broward County to enact similar strategies