Low-Income Housing Tax Credits & Cost Containment in Utah, 2018

Utah’s 2018 Qualified Allocation Plan awards points based for cost containment and efficient use of credits. 

Cost Containment

No Applicant or Related Party shall receive more than $1,000,000 or 20% of the state’s anticipated available annual Housing Credit Ceiling Amount, whichever is less, for any one project or in the aggregate for multiple projects.

In an effort to encourage efficient use of the Housing Credit, with an emphasis on producing the greatest number of quality, sustainable, and energy efficient units as possible, Applications will include the potential for up to 500 points for cost efficiency.

Each project’s costs will be calculated at five levels:

  • Hard Costs per unit;
  • Hard Costs per Net Residential Square Footage (NRSF);
  • Total Development Costs (TDC) per unit;
  • TDC per NRSF; and
  • Housing Credits per LIHTC bedroom

Hard Costs are calculated as the sum of costs for existing structures, site work, rehab and/or new construction, and hard cost contingency, as related to the housing components of the development only. The costs considered for calculating these points will not include any costs related to commercial or retail space.

Each cost category (Hard Costs per unit, Hard Costs per NRSF, TDC per unit, TDC per NRSF, and Housing Credits per low-income bedroom) will then be measured against the rolling average, plus an inflation factor for the cost of construction determined by a third-party consultant. Those averages will be published as Exhibit 8E, Average Cost Data. The spreadsheet Application will calculate the score of these cost categories, determine an average of the three scores, and apply points for the average score.

Scores are awarded as follows:

≤ 80% of Average                            500 points

80.1% ‐ 90.0% of Average             400 points

90.1% ‐ 100% of Average              300 points

100.1% ‐ 125% of Average            150 points

≥ 125.1% of Average                       0 points

Contributed By: 
National Housing Trust

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