By Dell Richards
Mutual Housing California announced Thursday that it has been allocated more than $14.5 million in aggregate federal and state tax credits, which it can use to raise more than $12 million for the development of housing in Woodland for agricultural workers.
Without redevelopment funding, developing affordable housing communities have to rely even more heavily on tax credits. Because the economy is picking up, private investors are willing to buy them again.
To raise the money for Mutual Housing at Spring Lake, Mutual Housing will syndicate $1,058,154 annually in federal tax credits over 10 years and $3,527,170 in one-time state credits for low-income housing. Depending on the market, investors will pay varying amounts for the credits to offset their taxes, entering into a limited partnership with Mutual Housing for ownership.
“We are very pleased to have Mutual Housing California develop a community in Woodland that will provide much-needed housing for many in need, including those who work so hard to grow and harvest our food,” said Tom Stallard, Woodland’s vice mayor. “This will be a beautifully designed addition to Woodland.”
The 62 apartments and townhomes at Spring Lake will be one of the first zero-net energy communities for farm workers in the nation. Energy-efficient design will bring energy use down and a photovoltaic system throughout the complex is expected to generate the needed amounts of electricity.
Mutual Housing was the only developer approved for tax credits in the Capital and Northern California region. With 148 points, it also had the highest tie-breaker score in the region for projects in the first 2013 round in California.
“People don’t realize how hard it is to put together the funding for each of our communities — and Mutual Housing at Spring Lake is no exception,” said Rachel Iskow, Mutual Housing’s chief executive officer. “We have spent three years in the financing and planning of the development.”
Construction is expected to begin this fall.
Four funding commitments helped Mutual Housing get a tie-breaker score that pushed it above the required minimum: $5.5 million from the U.S. Department of Agriculture; $1 million from the state’s Joe Serna Jr. Farmworker Housing Grant Program; $910,000 from the city of Woodland; and a $16.7 million loan commitment from Citibank for construction and $1,143,000 as a permanent loan.
“It’s a very competitive program,” said Holly Wunder-Stiles, Mutual Housing’s director of housing development. “You don’t apply unless you have a good score. The only way to get a winning tie-breaker score is to have other, public funding sources like we had.”
Added Iskow, “Without redevelopment funding, it was crucial to have federal funding. The city of Woodland’s financial commitment was the key to leveraging both the tax credits and the USDA loan.”
Spring Lake is the first Mutual Housing community for agricultural workers and is the first permanent housing community in Yolo County targeted to these workers. The community will have open areas, a children’s play area, a basketball hoop and community garden.
A community building also will have a computer learning lab and a community room for classes, meetings and social events as well as offices.
Workshops in English as a second language, financial education, home-buyer preparation and college planning will be given by both Mutual Housing and local partners. Mutual Housing also offers leadership development instruction and mentoring for both youth and adults.
The California Tax Credit Allocation Committee made the preliminary reservation of tax credits — the equivalent of the financing commitment — at its meeting Wednesday.
Founded in 1988, Mutual Housing California develops and operates rental housing throughout the Sacramento region. One of its most recent projects is New Harmony, which opened in February at 3030 Cowell Blvd. in South Davis. New Harmony features 69 one-, two- and three-bedroom units.
For more information, visit www.mutualhousing.com.