The Poverty & Race Research Action Council (PRRAC) issued a report highlighting features of state Low Income Housing Tax Credit (LIHTC) policies that have the potential to reverse segregated housing patterns and expand housing opportunities for low income households and households of color.
Building Opportunity II: Civil Rights Best Practices in the Low Income Housing Tax Credit Program (2015 update) analyzes the Qualified Allocation Plans (QAPs) of each state and New York City and Chicago as of December 31, 2014. The federal LIHTC program requires each state agency that allocates tax credits, generally housing finance agencies, to have a QAP. The QAP sets out the state’s eligibility priorities and criteria for awarding LIHTCs to housing projects. In some states, the QAP also sets out threshold criteria for noncompetitive 4% tax credits and any state LIHTCs.
One major category of analysis considered QAP provisions that related to racial and/or economic concentration or deconcentration. A few states explicitly mention the role of LIHTC development to reduce racial segregation or to emphasize development in opportunity areas. For instance, Massachusetts has QAP threshold requirements and a point scoring system emphasizing housing in opportunity areas, and Pennsylvania awards up to 20 points for developments in low poverty areas. Some states have multiple provisions pertaining to deconcentration. For example, except for preservation-oriented projects, New Jersey will not approve a project proposed for a census tract that already has 30% or more of its units assisted with LIHTC, unless the project meets the definition of redevelopment and includes relocation options to higher opportunity areas and mobility counseling. In addition, New Jersey and Pennsylvania set aside LIHTC for suburban and rural areas.
Another category of analysis considered QAP provisions that avoid detrimental community features or provide incentives for positive community features. An example of the former include a North Carolina provision which awards points for projects at least one-half mile away from airports and hazardous material sites. An example of the latter is an Indiana provision which awards up to eight points for projects in close proximity to high-performing schools. Another example is a Georgia provision that awards two points for every positive factor within two-miles, factors such as a town square that is a hub for civic activity (such as city hall) and commercial activity (such as a grocery store). Twenty-three of the 52 QAPs include some scoring preferences for siting near transit. For example, an Arizona provision awards up to 20 points to projects located in close proximity to a high-capacity transit station.
Some states have set-asides for projects in Qualified Census Tracts (QCTs), but only if a project contributes to a concerted community revitalization plan. QCTs are census tracts with a poverty rate of 25%, or in which 50% of the households have incomes less than 60% of the area median income. For instance, Nebraska sets aside up to 33% of its LIHTCs for such projects.
PRRAC also identifies QAP provisions that address affirmative marketing, tenant selection, and outreach to low income populations. In Michigan, in order to receive any bonus points, one of several requirements a project developer must agree to is to have a continuous outreach program in order to maintain a well-balanced waiting list that will ensure the project meets its affirmative marketing goals at all times. All applicants for LIHTCs in Massachusetts must have a detailed plan indicating how the owner intends to attract underserved populations, including people with disabilities and minority households. The Rhode Island QAP is the only one that offers scoring incentives for affirmative marketing to non-English speaking populations.
More than half of the states include scoring incentives and/or requirements to promote access to LIHTC projects by Section 8 voucher households and public housing residents. Delaware specifies that applicants must market their developments to people on the local public housing agency’s waiting lists.
Building Opportunity II: Civil Rights Best Practices in the Low Income Housing Tax Credit Program (2015 update) is at http://www.prrac.org/full_text.php?item_id=14901&newsletter_id=0&header=Current%20Projects
More information about QAPs is on page 7-20 of NLIHC’s 2015 Advocates’ Guide, http://nlihc.org/sites/default/files/Sec7.06_Qualified-Allocation-Plan_2015.pdf
More information about LIHTC is on page 5-32 of NLIHC’s 2015 Advocates’ Guide, http://nlihc.org/sites/default/files/Sec5.10_LIHTC_2015.pdf