Ladies and gentleman, boys and girls, children of all ages, welcome to the Great QAP Debate.
Are you ready to rumble?
The twist in this evening’s fight is like something out of an O Henry story: Both sides need to claim victory, but to acquire it, they must agree not to battle.
Sounds boring, right? Metaphorically, it is. But what hangs in the balance are the lives of millions of Americans—the working poor and disadvantaged, homeless veterans and hungry children—struggling just to keep a roof over their head.
And that roof is made possible by an arena we call the low-income housing tax credit (LIHTC).
In this corner, draped in the state flag and weighing in as the 800-lb. Golden Goose, is your friendly local housing finance agency, trained by Old Man HUD.
And in the opposing corner, at 30 years old and weighing in at a hefty 2.8 million units, is the LIHTC developer, master of the mixed-martial art of cost containment.
The closest thing to a “win” in this arena is a draw, two sides meeting in the middle, taking off their gloves and agreeing to disagree.
But as the bell clangs for Round 1, it’s heard by two very distinct audiences: those lucky enough to score a ticket inside, and those waiting on endless lists out in the shivering cold, hearing a hollow chime echoing over the Public Address system.
As you may have guessed, this is no ordinary title fight. And I’m not just saying that because Mike Tyson just entered the ring wearing an evening gown, jumping up and down like Rumpelstiltskin (read on).
This is a triathlon.
Tale of the Tape Measure
It’s not just brawn that counts in this arena, but beauty too, and as with both boxing and beauty pageants, you need a way to keep score. The QAP is that rulebook.
But the rules can change drastically year-to-year—depending on a state’s most pressing (political or natural) needs, such as rebuilding homes for tornado victims, or ending veteran homelessness. And it can change without warning, adding requirements that make it more expensive to compete (think LEED certification, or on-site supportive services).
It’s hard to train—for boxing, beauty pageants or otherwise—when the rules of the game are in flux.
So, a proposed development must look great in an evening gown, shine in a swimsuit, dazzle during the talent contest, and be prepared for any question. And let’s not forget, it has to know how to punch—it must be flawless to be feted.
These hoops through which LIHTC developers must jump are rings of fire that could, and often do, burn the bottom line: To secure money, developers could lose money. Or to put this paradox another way: The plastic surgery needed to win the beauty contest may cost more than the prize at stake.
Housing Finance Alchemies
The HFA has an empathetic tale too, and should be forgiven for being overly prescriptive—they are often pressured, politically, to act a certain way.
But even in the absence of overt political pressure, they’re still tasked with the nearly impossible: Go out and administer a miniscule amount of medicine to cure a million ills—a triage where the wounded outnumber the surgeons a thousand to one.
In this arena, HFAs have to be alchemists, too, spinning so little straw into so much gold: like developers, they have to be strong, beautiful and magical all at once, to make things happen.
The question is: How can we build consensus on both sides of this coin, and spin that into actionable dollars and cents, bricks and mortar? How can we make the QAP process more transparent, more feasible, or at the very least, more collaborative?
Because ultimately--no matter how many points a developer scores or how successful an HFA is in allocating credits—we’re all fighting for the same thing: safe, decent affordable housing for all Americans.
It’s a calling, this line of work—not just a way to make a buck, but a way to make a difference—and as an industry, we can do a better job at stretching our scant resources.
We just need the space and time to listen to each other.
So, in this series of columns, we’ll provide the space and listen to the challenges and opportunities surrounding the Great QAP Debate—giving each side it’s due to break bread and common ground— culminating in a panel session at our spring AHF Live: Housing Developers Forum in May.
If we can find a resolution, it could mean the world to a lot of people out there, wait-listed into obscurity.