No tax credits for Sevier low-income housing projects | News

NASHVILLE – Officially known as the Low-Income Housing Tax Credit Program administered by the Tennessee Housing Development Agency, an initiative that could have brought up to three housing developments to Sevier County resulted in none of the three proposals being selected for awards of tax credits.

Had any of the three proposals been approved, the development would have represented the first time since 2012 that a multifamily housing development in Sevier County received state allocations in the form of tax credits from the agency.

Proposals for tax credits were made in February by private developers across Tennessee for either the construction of new units or the rehabilitation of existing units. On Tuesday, THDA released the results of its ranking system for projects proposed across the state.

Michael Blade, THDA's director and assistant legal counsel for multifamily development, verified that none of the three projects proposed for Sevier County made the cut.

"None of them are going to get an allocation, at least this year" he said. Applications for the program open each February, and developers are notified in June of the result of their proposals.

The three Sevier County multifamily development proposals considered by THDA staffers for the 2016 tax credit program were:

• Glade Ridge Apartments, 1359 East Parkway, Gatlinburg – 92 units proposed by developer John Huff of Alabama and consultant Phillip Vaughn of Nashville.

• Highland Ridge Apartments (phase II), 1415 Avery Lane, Sevierville – 51 units proposed by Phyllis Vaughn and Campbell Brown. In THDA's records, the project was identified as having nonprofit status.

• Sevier Heights, address to be determined on Snyder Road, Sevierville – 60 units proposed by Chase Northcutt and D'Anne Hilsmier. Like Highland Ridge, the project was identified as having nonprofit status.

In exchange for the tax credits, developers selected by THDA agree to keep long-term rent prices stable.

In an April interview with The Mountain Press, THDA executive director Ralph Perrey explained the program.

"Tax credits give the private sector the ability to build," he said.

"They (developers) then pledge to keep the units rent-controlled for the next 15 to 20 years. Keep in mind who these are for. It's income qualified. It could be someone making $13 an hour qualified to live in a development....It's places they've been driving by for years they never knew were tax credit. It's often the nicest and newest stuff built."

In 2012, Sevierville's Highland Ridge Apartments and Knob Ridge Apartments in Seymour were the most recent projects in Sevier County to be awarded low-income housing tax credits.

Blade explained options for developers who will not be awarded tax credits this year. One is to apply again in February 2017 for what Blade said agency staffers refer to as the 9 percent – or tax credit – program.

Developers can also apply for what Blade called the 4 percent program, in which those selected are awarded about half the dollar value they're awarded in the competitive Low-Income Housing Tax Credit Program.

Applications are still open for 2016 funding in the other program, Blade said. He explained that developers who have approximately 100 units or more in their proposed complex are the ones most likely to benefit from the four percent – or bonds – program.

"Bond deals are noncompetitive," said Blade. "Applicants just have to meet a flooring threshold. They could apply right now."

He cautioned that developers would have to apply for the bond program hastily in order to have a chance for 2016 bond funding.

Of the three proposals in Sevier County, Highland Ridge Apartments received the highest ranking in THDA's assessment of all proposals. Glade Ridge Apartments ranked the next highest in Sevier County, followed by Sevier Heights.

Blade described the rankings among the 34 statewide proposals in the general pool as being decided by tiebreaker elements, specifically the design of the units to be rented.

"With respect to the tax credits they were asking for," said Blade, "they (successful applicants) were making more efficient use of the livable space in the plans they submitted."

In addition to the 32 projects proposed statewide in the general category, there were additional proposals in categories such as rural and preservation. In all, 54 projects were proposed statewide for THDA's 2016 Low-Income Housing Tax Credit Program.

The 20 successful applicants have until 2018 to complete construction of their proposed housing developments and move residents into the new units. Of the 20 projects selected to receive tax credits, one is in Blount County and two are in Knox County.

Like Perrey, Blade said low-income developments aren't always well understood.

"We're talking about housing for working folks," said Blade. "It's the checker at Kroger, the first-year firefighter, the first-year teacher. It's workforce housing. Some people think it's for idle, lazy people. It's a little different than what people think it is."