Garden City is one of the fastest growing areas in Kansas. Job growth in the agribusiness, energy and retail sectors is creating an urgent need for affordable housing. Kansas Housing partnered with the Overland Property Group to build 96 apartments at the Reserves of Prairie Ridge using the housing tax credit program. The property consists of 48 two bedroom units and 48 three bedroom units with 45 units affordable to households earning less than 50% of the area’s gross median income.
The Low Income Housing Tax Credit encourages investment of private capital in the development of rental housing by providing credits to offset an investor’s federal income tax liability. Financial institutions, such as banks, insurance companies and government-sponsored enterprises, make equity investments in exchange for receiving the tax credits. Equity from the sale of tax credits reduces the amount of debt financing the property owner incurs. This process reduces the property’s monthly debt service, lowers the operating costs, and makes it economically feasible to develop affordable housing.
Authorization of the program was established in the Tax Reform Act of 1986. Investment in the properties is provided by private institutions in exchange for federal income tax credits.
How To Apply
The 2020 Low Income Housing Tax Credit application process closed on February 7.
KHRC evaluates housing tax credit applications based on several characteristics. Priority is given to proposals that:
- Provide housing in rural areas;
- Preserve housing with a HUD Section 8 or USDA Housing Assistance Payment contract, or any application from or for a Public Housing Authority;
- Provide housing for special needs populations;
- Offer a portion of units below fair market rate for the property’s area;
- Constitute a second or later phase of a property with a current waiting list;
- Address a housing shortage as indicated by market data.
For more information on priority housing needs and requirements, please review the Qualified Allocation Plan.