In 2024, Santa Clara County secured LIHTC awards to fund eight developments—seven through the 4% tax credits, and one through the 9% tax credit. In total, these awards will help add 1,204 affordable rental homes across the county. Local funding commitments from Santa Clara County and City of San Jose made the developments more competitive, ensuring our county saw its fair share of state and federal tax credits. Five of the awarded developments received Measure A funding from the county, and three of those also secured City of San Jose NOFA awards in 2021.

Image source: Van Meter Williams Pollack LLP

In 2024, Santa Clara County secured LIHTC awards to fund eight developments—seven through the 4% tax credits, and one through the 9% tax credit. In total, these awards will help add 1,204 affordable rental homes across the county. Local funding commitments from Santa Clara County and City of San Jose made the developments more competitive, ensuring our county received a representative portion of state and federal tax credits. Five of the awarded developments received Measure A funding from the county, and three of those also secured City of San Jose funding awards in 2021. 

The Low-Income Housing Tax Credit (LIHTC) program is a key federal resource for producing and preserving affordable multi-family rental housing. It supports the construction, acquisition, and rehabilitation of homes for low- and moderate-income households. In California, the California Tax Credit Allocation Committee (CTCAC) oversees the LIHTC program and awards credits annually through a competitive process based on the state’s housing priorities.

Overview of LIHTC Awards in 2024

Tax credits are issued based on a development’s eligible construction costs and come in two forms: 9% and 4% credits. The 9% credits typically cover about 65% of a development’s total costs, while 4% credits cover about 30%. The 4% credits are awarded to developments that receive tax-exempt private activity bonds from the California Debt Limit Allocation Committee (CDLAC). Developers must assemble the remaining funds from a mix of sources, including local, regional, state, or federal grants and loans.

In 2024, CDLAC received 354 applications for developments throughout the state, and 138 developments (39%) were awarded 4% credits and bonds. The 4% program held two funding rounds:

• Round 1: From Santa Clara County 11 applications were submitted. Only 2 new-construction developments were awarded credits: Monterey Family Apartments in Gilroy and Julian Street Studios in San Jose.
• Round 2: 15 applications were submitted for developments in Santa Clara County, and five were awarded credits—3 new construction and two preservation/rehabilitation developments. Notably, 525 N Capitol, Kooser Apartments, and Moreland Apartments applied in both rounds and received awards in Round 2. It is common for developers to apply multiple times before securing credits.

7 developments in Santa Clara County received the 4% Tax Credit for a total of 1,103 affordable homes

For the 9% credit pool, CTCAC awarded $113.9 million in federal tax credits to 55 developments across the state, totaling 3,232 affordable units. Out of 172 applications, 55 developments (32%) received awards. 9% credits are highly competitive due to limited credit availability. 

Developers from Santa Clara County submitted two 9% LIHTC applications in 2024—one in each round—and secured one award: Hawthorn Senior Apartments in San Jose. This development will add 101 new affordable units for senior residents.

Factors Influencing Awards

Scoring is based on factors such as the depth of affordability, target population, access to public transportation, and proximity to schools and parks. Due to high demand, developments try to score the most possible points in each category of the scoring system. Developers aim to maximize points in areas such as development experience and track record, deep affordability (serving households at 10%-30% of the Area Median Income), site amenities, and access to services.

In both the 4% and 9% LIHTC programs, most project applications aim for the maximum point score, making the tie-breaker score a critical factor in determining which developments are awarded credits. The tie-breaker process prioritizes developments that not only meet the technical criteria but also demonstrate a strong commitment to serving high-need populations and securing local support.

CTCAC uses a two-step tie-breaker process. Step 1 identifies projects with the highest point scores that also address an unmet housing need. Priority is given to developments serving special populations, such as unhoused individuals, seniors, or extremely low-income households. These developments must also meet specific criteria, including the provision of on-site services, suitable unit sizes, and resident amenities.

Step 2 applies a financial formula that rewards projects that can leverage significant public investment. The formula calculates the total amount of committed public funds multiplied by the number of units divided by the total development cost. This formula favors cost-effective developments that have secured substantial support from local, state, or federal sources.

Additionally, the tie-breaker prioritizes developments in high-resource areas—neighborhoods with strong schools, transit access, and economic opportunities. This reflects the state’s broader goal of advancing housing equity by increasing access to opportunity-rich communities.

Local Funding Leveraged

Local investments played a key role in Santa Clara County’s success. Monterey Family Apartments, Distel Circle, 525 N Capitol, and Kooser Apartments received Measure A funds. Additionally, 525 N Capitol and Kooser Apartments also secured City of San Jose NOFA awards in 2021. These local commitments often depend on the development receiving tax credits, which in turn enhance competitiveness in the allocation process. Non-profit developers can use these local funds to leverage more state and federal tax credit resources.

In total, eight developments in Santa Clara County received tax credits in 2024:

• 7 developments received 4% LIHTC- producing and preserving 1,103 affordable housing units
• 1 development received 9% LIHTC, producing 101 affordable housing units

Together, these awards support the production and preservation of 1,204 affordable rental homes, helping advance housing stability for low-income families in the region.

Was Santa Clara County Awarded Its Fair Share?

People often wonder how well Santa Clara County competes within the state for LIHTC resources. In 2024, the answer is encouraging:

• Although Santa Clara County accounts for 4.9% of California’s population, it received nearly 13% of the 4% of credits awarded statewide.
• It was the top recipient of 4% credits among the nine Bay Area counties and ranked fourth statewide.

This ability to secure tax credit funding demonstrates Santa Clara County’s commitment to building and preserving the affordable housing it knows this community needs through intentional coordination with the development community and among jurisdictions, which is especially important given the region’s high construction and development costs.

Santa Clara County’s awards were proportionate and competitive compared to large counties like Los Angeles, Riverside, and San Diego, which received 20.4%, 14%, and 13.7%, respectively. Within the Bay Area, the region overall received a significant share of total credits, aligning closely with population and housing needs.

For the 9% program, CTCAC allocates credits through both set-asides and geographic apportionments. The set-asides include 10% for nonprofit sponsors (with a focus on units for the unhoused), 20% for rural developments, 4% for special needs housing, and 5% for at-risk housing. Under the geographic apportionment, remaining funds are distributed across 12 regions based on renter cost-burden data and adjusted for construction costs.

Santa Clara and San Mateo counties are in the South and West Bay region pool. In 2024, San Mateo County submitted six applications and received three awards, and Santa Clara County submitted two applications and received one award. For both the counties in the South and West Bay region, the success rate of receiving the 9% tax credit is 50%. 

The 2024 LIHTC awards show steady progress for Santa Clara County’s affordable housing pipeline. With strong local funding support, the county continues to secure valuable funding that will bring more affordable homes to low-income families in our community.