Texas Low Income Housing Information Service (Texas Housers), an NLIHC state partner, released a report on January 25 titled “Fair Housing and Balanced Choices: Did Texas Reduce Government-Funded Segregation?” The report analyzes the effect of a 2013 shift in Low Income Housing Tax Credit award criteria on the location of housing tax credit developments in the state’s five largest metro areas: Austin, Dallas, Fort Worth, Houston, and San Antonio. The new race-neutral criteria resulted in properties located in areas with lower concentrations of racial minorities and higher opportunity. The report finds the award-criteria changes were a success.
In 2013, in response to a federal fair housing suit that made its way to the Supreme Court in 2015 (see Memo 6/29/15), the Texas Department of Housing and Community Affairs reformed their system for awarding housing tax credits. Prior to the changes, the state’s Qualified Allocation Plan (QAP) process for evaluating tax credit applications favored developments in areas with high concentrations of minorities and high poverty rates. People of color constitute 90% of Texas residents with housing vouchers, and the concentration of tax credit developments in minority neighborhoods served to perpetuate racial segregation. In addition to being located in areas with high minority populations, the developments given tax credits prior to the 2013 were located in low opportunity neighborhoods with limited access to quality schools. The State designed the 2013 reforms, including points for an “Opportunity Index” and “Education Excellence” in the QAP, to reverse these trends. Texas Housers evaluated whether the reforms, which emphasized developments in low-poverty, high-opportunity neighborhoods zoned for high-performing schools, were successful in reducing the locating of tax credit developments in racially segregated communities.
The report compared the location of developments in Texas’s five largest metro areas that were awarded 9% tax credits between 2006 and 2012 to those awarded between 2013 and 2015, after the reforms were implemented. The study found that 68% of tax credits awarded between 2006 and 2012 went to developments in tracts with Hispanic or black populations above the state average. The 2013 changes to the QAP reversed this trend; between 2013 and 2015 the majority of the developments awarded tax credits were located in areas with below-average minority populations. Beyond racial demographics, 52.2% of non-elderly tax credit developments in the five largest metro areas were located in Census tracts with less than 15% poverty levels, up from 22.8% in the seven years prior to the reforms. Whereas 23.2% of units awarded tax credits between 2006 and 2012 were located in areas of extreme poverty, with poverty levels above 40%, only 5.5% of developments awarded tax credits after the reforms were located in areas of extreme poverty.
The Texas Housers study of tax credit awards in the five metropolitan areas found that Texas had in fact reduced “government-funded segregation” through the 2013 reforms. On the other hand, the report concluded that three years of development aimed at decreasing segregation and increasing opportunity for residents of tax credit housing had only just begun to make up for decades of racial segregation fostered by previous tax credit developments. “Low income families still have limited housing choice in low poverty, safe neighborhoods with access to high performing schools,” the report states. “It would take many more QAP cycles before ‘balance’ in housing choice was reached.” Texas Housers advocates for continued consideration of Education Excellence and the Opportunity Index in the QAP process. Unfortunately, critics of the reforms successfully petitioned for changes to the 2017 award process which threaten the advances made.
"If we want housing choices to be truly balanced and integrated, we need to learn from Texas's experience,” said Charlie Duncan, Texas Housers fair housing planner and report co-author. “With the information we now have, there's no going back to the segregated status quo."
Access the report at: http://bit.ly/2lT344g
For more information, contact Texas Housers Communications Director Will Livesley-O’Neill at: email@example.com