Analysis of Qualified Allocation Plans for Low-Income Housing Tax Credits and Their Relation to Poverty Deconcentration
Mentor 1
Marcus Britton
Start Date
10-5-2022 10:00 AM
Description
The Low-Income Housing Tax Credit (LIHTC) policy is one of the largest housing policies in the US with more than 3.2 million units placed in service since its inception in 1987 with an annual budget of $8 billion. Annually, each state develops Qualified Allocation Plans (QAP)—a guiding document—to lay out the policies, procedures, and selection criteria for competing applications to award tax credits to LIHTC developers. This project, thus, explores the changes in the selection criteria in the QAPs for Wisconsin between 2005 and 2015. Over the years, LIHTC has been criticized for concentrating projects in low-income neighborhoods, thereby exacerbating poverty concentration which is antithetical to the federal housing policy goals of deconcentrating poverty. Several selection criteria in QAPs directly affect the siting pattern of LIHTC units. These selection criteria are often associated with point systems for evaluating applications. This exploratory research, using content analysis, examines the changes in the selection criteria and the associated points that aim towards achieving the goal of poverty deconcentration in tandem with the federal vision for low-income housing policy. We carefully read each QAP and code the selection criteria based on the three dimensions: density reduction, limiting developments in blighted areas, and access to high opportunity areas. Furthermore, we create an index of change, based on the point and criteria, that captures the shift towards either poverty concentration or deconcentration. The initial findings suggest that QAPs are instrumenting poverty deconcentration by instituting negative changes in criteria and reducing points for those criteria that are often associated with poverty concentration. Conclusively, Wisconsin QAPs have made efforts towards achieving poverty deconcentration that would essentially allow the disadvantaged population the possibility of upward mobility and access to geographies of opportunity in the future.
Analysis of Qualified Allocation Plans for Low-Income Housing Tax Credits and Their Relation to Poverty Deconcentration
The Low-Income Housing Tax Credit (LIHTC) policy is one of the largest housing policies in the US with more than 3.2 million units placed in service since its inception in 1987 with an annual budget of $8 billion. Annually, each state develops Qualified Allocation Plans (QAP)—a guiding document—to lay out the policies, procedures, and selection criteria for competing applications to award tax credits to LIHTC developers. This project, thus, explores the changes in the selection criteria in the QAPs for Wisconsin between 2005 and 2015. Over the years, LIHTC has been criticized for concentrating projects in low-income neighborhoods, thereby exacerbating poverty concentration which is antithetical to the federal housing policy goals of deconcentrating poverty. Several selection criteria in QAPs directly affect the siting pattern of LIHTC units. These selection criteria are often associated with point systems for evaluating applications. This exploratory research, using content analysis, examines the changes in the selection criteria and the associated points that aim towards achieving the goal of poverty deconcentration in tandem with the federal vision for low-income housing policy. We carefully read each QAP and code the selection criteria based on the three dimensions: density reduction, limiting developments in blighted areas, and access to high opportunity areas. Furthermore, we create an index of change, based on the point and criteria, that captures the shift towards either poverty concentration or deconcentration. The initial findings suggest that QAPs are instrumenting poverty deconcentration by instituting negative changes in criteria and reducing points for those criteria that are often associated with poverty concentration. Conclusively, Wisconsin QAPs have made efforts towards achieving poverty deconcentration that would essentially allow the disadvantaged population the possibility of upward mobility and access to geographies of opportunity in the future.
