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MINUTES <br />CITY COUNCIL <br />APRIL 2, 1997 <br />credits. However, one additional requirement is rents cannot exceed 30% <br />of income. <br />Brachman reported that under the limitation of rents being set at 30% of <br />income, there is room to increase rents at The Provinces. One bedroom <br />rents are currently at the $505 to $520 per month range and two bedrooms <br />at $595 to $620 per month. <br />Scalze asked the incentive to go to 100% affordable housing at The <br />Provinces. <br />Ippel replied that the incentive is more tax credits. Brachman explained it <br />is a Federal income tax credit which the government created to encourage <br />investment in affordable housing. The developer can use these tax credits <br />or sell all or a portion of them to corporltions. Tax credits ~enerate <br />additional dollars so investors can make improvements to a project. <br />Scalze asked if the Federal government kept track of how investors use <br />these dollars. Brachman re~Iied that tl~e governmenC does not. <br />Fahey poinCed out that tax credits provide an incentive for a developer to <br />increase the number of affordable housing units. <br />Ippel stated that the incentive is to build new units or rehab existing units. <br />Brachman replied that a developer is limited as to the amount of money <br />that can be taken as a fee, and is required to put a certain percentage of the <br />dol(ars ~;enerated by tax credits back into the project. Since tenants <br />already fall into Yhe income guidelines established for tax credits, it was <br />Dominium's feeling it should take advantage of tax credits and generate <br />more dollars which could go 61ck into The Provinces. <br />Scalze indicated that sprinklering the buildin~ would not influence her to <br />support an increase in tl~e percentage of affordable housing at The <br />Provinces. Brachman pointed out tllat existing and prospective tenants <br />already meet these income guidelines. Dominium does not plan to force <br />anyone to move out. <br />Fahey pointed out the confusion the Dominium letters to tenants had <br />caused, and stated many tenants left because of the concern that the <br />complex would be converted to affordable housing. <br />Brachman estim~ted thlt 12 to 15 tenants left as a result of those letters. <br />There are 118 units at The Provinces. <br />