The California Tax Credit Allocation Committee (CTCAC) recently released proposed regulation changes to the 2012 Tax Credit program and subsequently conducted a 30 day public comment period in which four public hearings were held to receive feedback on the proposed changes. Nearly 42 individuals and organizations formally commented on CTCAC’s proposals. In response to the feedback the agency received, CTCAC has released a finalized list of recommendations to be considered by the Committee. This document also includes a summary of comments received, CTCAC staff’s responses to those comments, and any revised proposed changes derived from the comments received. A summary of the final proposed regulations is as follows:

  • In 4%-plus-State credit projects, CTCAC will treat developer fees in tax credit basis consistently among all 4% credit projects, regardless of the presence of State credits. Also, the agency has clarified that mixed-use projects may pro-rate developer fees between residential and nonresidential costs;
  • The agency has revised the definition of the term “High Rise Development” to include projects of six or more floors, and has eliminated the podium parking condition;
  • CTCAC has granted authority for a larger first-round award if fewer than half of the annually available State credits are reserved in the competitive nine percent (9%) first round;
  • Updated market study guidelines, including:
    • New requirement that CTCAC will open its market study guidelines to public review and comment;
    • Clarification that market studies shall be updated when either proposed subject rents change by more than five percent, or the distribution of higher rents increases by more than five percent, or 180 days have passed since the first site inspection date of the subject property and comparable properties;
    • A clarification that the rural policy applies only if a second new construction project is underway;
  • The agency has established a process by which high cost projects would not be considered for funding unless approved by the Committee for consideration in spite of the project’s cost and has eliminated the $400,000 threshold for additional consideration status;
  • Rather than proposing that feasibility would be evaluated using targeted income levels to which the project would be regulated, CTCAC has clarified that the agency will look at all income, including initial proposed rents.

To view the complete finalized list of proposed changes to CTCAC’s 2012 Housing Tax Credit Program, click here.