A study in the Journal of the American Planning Association, “Affordable Housing, Disasters, and Social Equity: LIHTC as a Tool for Preparedness and Recovery," evaluated how states are using the Low Income Housing Tax Credit (LIHTC) for disaster preparedness, hazard mitigation, and recovery efforts. Of the 53 states and territories evaluated, they found only 24 prioritized disaster preparedness and recovery in LIHTC qualified allocation plans (QAPs). States with higher homeownership rates, lower home values, and lower rents were more likely to have disaster-related provisions. The number of federal disaster declarations was only marginally different between states with and without disaster-related provisions in their LIHTC qualified allocation plans.
The authors examined the available 2017 and 2018 QAPs of all states (except Alaska), the District of Columbia, Puerto Rico, the Virgin Islands, and the Northern Mariana Islands. LIHTC facilitates the construction and rehabilitation of affordable housing by offering federal tax credits to developers of affordable housing. States inform applicants of LIHTC selection state-level criteria and priorities through the QAPs, and then award tax credits through a competitive application process. The authors of the study identified provisions in the QAPs that would encourage developers to make additional efforts related to disaster mitigation, preparedness, response, or recovery. Only 24 states and territories had any disaster-related provisions in their qualified allocation plans.
QAPs were categorized depending on the kinds of provisions included. Mitigation and preparedness provisions encouraged or required developers to site projects in areas less likely to be affected by disasters, or to incorporate design features that would reduce vulnerability. Recovery provisions encouraged the use of LIHTC to rehabilitate or rebuild housing affected by disasters. Eight states had both mitigation and recovery provisions, 13 states had only preparedness provisions, and three had only recovery provisions.
The authors used American Community Survey (ACS), HUD, and FEMA data to compare the characteristics of states with and without disaster-related provisions. They examined homeownership rates, median rents, poverty rate, state median income, and the number of federal disaster declarations in each state, among other features. The analysis showed that states with high homeownership rates, lower median rents, and fewer LIHTC units already in existence per million residents were more likely to include disaster-related provisions in QAPs. States with disaster-related provisions experienced more federal disaster declarations since the LIHTC program was created in 1986, although the differences were not statistically significant. While most states often targeted LIHTC funds for relief following a disaster, having the explicit provisions in the QAP made the distribution more likely.
The researchers also found that, even though states with both mitigation and recovery disaster provisions have had more federally declared disasters, such states received substantially less FEMA housing assistance between 2013 and 2017 than states with no provisions. They call for further research on the interaction of disaster exposure and federal aid.
“Affordable Housing, Disasters, and Social Equity” is available at: https://bit.ly/2uv14oO
More information about LIHTC is on page 5-14 of NLIHC’s 2019 Advocates’ Guide.