2. Problem Prior to start of Affordable Housing Program (AHAP), early market studies showed low market values in all four neighborhoods targeted for revitalization Assumption: Taxes will remain low In the last 2 years, taxes have jumped to levels reflective of the more affluent areas in the city Tax burden on our AHAP families
3. Current Tax Appraisal Formula Value cited on building permit after completion Includes land Loans or deeds of trust info Sales info in the area (comparables) Compare cost to build against the market value Make value decision
4. Options Establish escrow accounts for all clients Special savings accounts for banks that don’t have escrow programs Reduce the cost of construction Investigate using RFPs Modular Increase subsidy from 40% to 50% Reduces the overall number of units constructed annually Create a fund to assist families Redesign program to include rentals
5. Options (continued) Work with the TGCAD to establish a more equitable appraisal methodology for AHAP units SAISD, County, TGCAD are supportive TGCAD proposed formula Amount of Mortgage/Construction Costs = Value Helps bring values closer to true value for the areas