TITLE 10. COMMUNITY DEVELOPMENT

PART 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

CHAPTER 1. ADMINISTRATION

SUBCHAPTER A. GENERAL POLICIES AND PROCEDURES

10 TAC §1.23

The Texas Department of Housing and Community Affairs ("TDHCA" or the "Department") adopts amendments to 10 TAC Chapter 1, Subchapter A, General Policies and Procedures, §1.23, concerning State of Texas Low Income Housing Plan and Annual Report, without changes to the proposed text as published in December 30, 2016, issue of the Texas Register (41 TexReg 10504) and will not be republished. The section adopts by reference the 2017 State of Texas Low Income Housing Plan and Annual Report ("SLIHP") as a rule. No changes have been made to the rule text or to the 2017 SLIHP in response to comment.

REASONED JUSTIFICATION. The Department finds that Tex. Gov’t Code §2306.0723 specifically authorizes the Department to consider the SLIHP as a rule. Accordingly, the amendment adopts by reference the 2017 SLIHP. The purpose of the rule and referenced 2017 SLIHP is to serve as a comprehensive reference on statewide housing needs, housing resources, and strategies for funding allocations. The document reviews the Department's programs, current and future policies, resource allocation plan to meet state housing needs, and reports on State Fiscal Year 2016 performance.

SUMMARY OF PUBLIC COMMENT AND STAFF RECOMMENDATIONS. The public comment period was between December 30, 2016, and January 27, 2017, and a public hearing was held on January 4, 2017, in Austin, TX. Written comments were accepted by mail, email, and facsimile.

Although no comments were received concerning the proposed rule amendment, the Department received eight comments on the 2017 SLIHP from one source: Texas Council for Developmental Disabilities ("TCDD").

Comment 1: TCDD commented on the unmet need for individuals with incomes below 30% AMFI, stating that failure to provide housing that is affordable to people with disabilities or to the elderly who rely on federal assistance, such as Social Security Disability Income ("SSDI") or Supplement Security Income ("SSI"), results in reduced safety or displacement from the community. Further, TCDD commented that only the Section 811 Program, Homeless Housing and Services Program ("HHSP"), and Emergency Solutions Grant Program ("ESG") target individuals with income below 30% AMFI and urged TDHCA to go beyond simply recognizing the unmet need and provide more for this income group.

Department Response: TDHCA’s mission is to administer its assigned programs efficiently, transparently, and lawfully and to invest its resources strategically and develop high quality affordable housing which allows Texas communities to thrive.

In addition to the Section 811 Program, HHSP, and ESG, TDHCA administers the Community Services Block Grant ("CSBG") Program, which serves Texans who fall within the very low and extremely low income categories. Through CSBG, TDHCA served more than 559,000 very low and extremely low-income Texans in SFY 2016.

Also, in the 2017 Qualified Allocation Plan ("QAP"), which governs the awarding and allocation of 2017 9% Housing Tax Credit ("HTC") program funds, scoring priority may be awarded to applicants who elect to restrict an additional 10% of the proposed low income units for households at or below 30% of Area Median Gross Income ("AMGI"). These units must be in addition to units required under any other provision of the 2017 QAP. While the pre-application period for the 2017 HTC has concluded, the Department is actively seeking stakeholder input on the development of the 2018 QAP.

Finally, through the Department’s Multifamily Direct Loan Program, funding is provided to nonprofit and for-profit entities for the new construction or rehabilitation of affordable multifamily rental developments. Funding is typically provided in the form of low interest rate, repayable construction-to-permanent loans. Multifamily developments funded through the Department’s Multifamily Direct Loan Program must comply with long-term rent and income restrictions and may be layered with additional funding sources (such as HTC). In the Multifamily Direct Loan Program NOFA, released in December 2016, funds under a Supportive Housing/Soft Repayment Set-Aside are intended to increase the number of 30% rent-restricted units and occupy them with households with an annual income of 30% Area Median Income ("AMI") or less who are not currently receiving any type of rental assistance. The Department will accept applications under this NOFA beginning on January 9, 2017. Based on the availability of funds, applications may be accepted until 5:00 p.m. Austin Local Time on August 31, 2017. The NOFA can be found at http://www.tdhca.state.tx.us/multifamily/nofas-rules.htm.

Through the administration of all programs, TDHCA will continue to solicit public and stakeholder comment to enhance program administration and further meet its mission. No changes have been made to the 2017 SLIHP in response to this comment.

Comment 2: TCDD referenced TDHCA’s Strategic Plan Goal 1 and recommended that TDHCA develop a target income category of between 0 and 110% of the level of SSI with the rationale that setting a threshold below "extremely low" will allow TDHCA to monitor, strategize, and allocate resources for a group that TCDD states has the greatest needs for housing and related supports.

Department Response: TDHCA’s Strategic Plan Goals reflect program performance based upon measures developed with the State’s Legislative Budget Board ("LBB") and the Governor’s Office of Budget, Planning and Policy ("GOBPP"). The goals are also based upon Riders attached to the Department’s appropriations bill. The Department believes that the goals and objectives for the various TDHCA programs, to the extent feasible, should be consistent with its mandated performance requirements. Revising income eligibility and setting a target income category of between 0 and 110% of the level of SSI for programs addressed by Goal 1 (titled "TDHCA WILL INCREASE AND PRESERVE THE AVAILABILITY OF SAFE, DECENT AND AFFORDABLE HOUSING FOR VERY LOW-, LOW-, AND MODERATE-INCOME PERSONS AND FAMILIES") is driven by recommending changes to specific program rules. Opportunities for public comment on program rules are made available at http://www.tdhca.state.tx.us/public-comment.htm. Further, the Department has developed a plan for ongoing stakeholder involvement in development of the 2018 Qualified Allocation Plan ("QAP"), which governs the HTC program. The 2018 QAP Project Plan is available at http://www.tdhca.state.tx.us/multifamily/docs/18-QAP-ProjectPlan.pdf. No changes have been made to the 2017 SLIHP in response to this comment.

Comment 3: Referring to Goal 3 of TDHCA’s Strategic Plan goals, TCDD recommended that people with the greatest need, those classified as "extremely low-income," should be included in efforts to improve living conditions through rental and energy assistance, citing the burden of fluctuating utility and rental payments for those living on fixed incomes.

Department Response: In the utility assistance programs that Goal 3 and the TDCC comment refer to, program rules require the Department to establish priority criteria to serve persons in Households who are particularly vulnerable such as the Elderly, Persons with Disabilities, Families with Young Children, Households with High Energy Burden, and Households with High Energy Consumption. Highest energy costs or needs in relation to income shall be the highest rated item in sliding scale priority determinations (10 TAC Chapter 5 Subchapter D, §5.407 and Chapter 6 Subchapter C, §6.307). No changes have been made to the 2017 SLIHP in response to this comment.

Comment 4: TCDD referenced Rider 5(a) of the General Appropriations Act and recommended that TDHCA increase the effective allocation of resources to reflect greater participation of extremely low-income individuals and households in mainstream community-integrated housing.

Department Response: As required by Rider 5(a) of the General Appropriations Act, TDHCA adopts an annual goal to apply no less than $30,000,000 of the funds available from the Housing Trust Fund, HOME Program, Section 8 Program, and Housing Tax-Credit Program's total housing funds toward housing assistance for individuals and families earning less than 30 percent of the AMFI. TDHCA regularly exceeds this goal. The FY 2016 Rider 5 Report states that $62,341,219 in funding assisted households at or below 30% AMFI, meeting the goal by 207.80%. No changes have been made to the 2017 SLIHP in response to this comment.

Comment 5: TCDD recommended that TDHCA include a goal to dedicate expected National Housing Trust Fund (NHTF) funding to establish community-integrated accessible housing for individuals who must rely on fixed Social Security income or incomes no greater than 20% AMFI.

Department Response: TDHCA has been named as the State Designated Entity that will administer NHTF funds in Texas. TDHCA has developed an NHTF Allocation Plan with public input in accordance with the HUD approved Citizen Participation Plan. The plan has already been submitted to the federal oversight agency and is awaiting approval; once the plan is approved, goals for activities will be included in Strategic Plan Goal 1. No changes have been made to the 2017 SLIHP in response to this comment.

Comment 6: TCDD recommended that TDHCA include a goal to encourage and provide incentives to employ people with disabilities in building, rehabilitating, or managing TDHCA housing programs in support of the Texas Employment First Policy for working age Texans adopted by the 83rd Texas Legislature.

Department Response: While the Employment-First policy, as required by Senate Bill 1226 (83rd Texas Legislature, Regular Session), only applies to the Health and Human Services Commission, the Texas Education Agency, and the Texas Workforce Commission, the Department recognizes the importance of competitive employment opportunities that provide a living wage for individuals with disabilities. Similar to the Department response to Comment 2, adding incentives to TDHCA programs to employ people with disabilities is driven by recommending changes to specific program rules. Opportunities for public comment on program rules are made available at http://www.tdhca.state.tx.us/public-comment.htm. Again, the Department has developed a plan for ongoing stakeholder involvement in development of the 2018 QAP, which governs the HTC program. The 2018 QAP Project Plan is available at http://www.tdhca.state.tx.us/multifamily/docs/18-QAP-ProjectPlan.pdf. No changes have been made to the 2017 SLIHP in response to this comment.

Comment 7: TCDD recommended that TDHCA include a goal to promote innovative approaches that advance community integrated housing opportunities for individuals with disabilities, and which may be funded through matching general revenue and federal funding.

Department Response: Similar to the Department response to Comment 2 and Comment 6, adding a goal to TDHCA programs to promote innovative approaches that advance community integrated housing opportunities for individuals with disabilities funded through matching general revenue and federal funding would be driven by changes to program rules. Opportunities for public comment on program rules are made available at http://www.tdhca.state.tx.us/public-comment.htm. Again, the Department has developed a plan for ongoing stakeholder involvement in development of the 2018 QAP, which governs the HTC program. The 2018 QAP Project Plan is available at http://www.tdhca.state.tx.us/multifamily/docs/18-QAP-ProjectPlan.pdf. No changes have been made to the 2017 SLIHP in response to this comment.

Comment 8: TCDD noted the success of the coordination between TDHCA and the Department of State Health Services ("DSHS") allowing Local Mental Health Authorities ("LMHAs") to become HOME Tenant-Based Rental Assistance ("TBRA") administrators. This initiative supported individuals in subsidized housing while waiting for permanent housing subsidies. Based on that success, TCDD recommends that TDHCA direct funding to serve other persons with disabilities who have extremely low incomes who are at risk for homelessness.

Department Response: TDHCA has programs that serve special populations, including Persons with Disabilities who have extremely low incomes, and the Department already provides TBRA to persons with disabilities through subrecipients that are separate and in addition to the coordinated effort with LMHAs and DSHS. As funding opportunities become available, TDHCA will work with other partner agencies as appropriate. No changes have been made to the 2017 SLIHP in response to this comment.

The TDHCA Governing Board approved the 2017 SLIHP and the final order adopting the amendments on February 28, 2017.

STATUTORY AUTHORITY. The amendments are adopted pursuant to the authority of Tex. Gov’t Code §2306.053 which authorizes the Department to adopt rules and pursuant to §2306.0723 which specifically authorizes the Department to consider the SLIHP as a rule.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 6, 2017.

TRD-201700856

Timothy K. Irvine

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 26, 2017

Proposal publication date: December 30, 2016

For further information, please call: (512) 936-7803