2018 Market Study Guidelines

The California Tax Credit Allocation Committee has posted its 2018 Market Study Guidelines, which apply to all tax credit projects as well as requests for tax-exempt bond authority. The following is a summary of the detailed guidelines:

  • Market studies must be prepared by an independent third party at the expense of the developer
  • Studies must be prepared within 180 days of the filing deadline, and must be updated if outside the 180 day timeframe, or is proposed project rents change by more than 5%, or if the distribution of higher rents increases by more than 5%. If 12 months have passed between the site inspection and the filing deadline, a completely new market study is required instead of an updated study.
  • A Market Study Index must be included as a separate attachment

2018 Methodology for Determining Rural Status of Project site

In line with this year’s 20% set-aside of 9% credits for projects in rural areas, the California Tax Credit Allocation Committee has released methodology for determining rural areas. All 9% applicants are required to document the rural or non-rural status of their project.

To be considered rural, the project must satisfy one of three criteria:

  1. Non-metropolitian Counties;
  2. Rural Housing Service (RHS) Eligible Area; or
  3. Small City Status.

1. simply refers to a list of 21 eligible counties, whereas 2. and 3. require more detailed methodologies and/or required documentation, all of which are outlined in CTCAC document.