All states and U.S. territories have some form of incentive for developing supportive housing in their low-income housing tax credit (LIHTC) programs, reports CSH (Corporation for Supportive Housing.)

A review of qualified allocation plans (QAPs), the documents that outline how housing finance agencies (HFAs) will award their housing credits, found that 54 plans included supportive housing incentives, up from 52 the prior year.

“We’re seeing a continued recognition of the need to prioritize supportive housing,” says Jane Bilger, CSH senior program manager.

HFAs have different strategies to leverage the LIHTC program to fund supportive housing. For example, 52 credit agencies provide general scoring incentives. In another move, nine agencies have adopted threshold requirements that mandate developments to dedicate 5% or more of their units for persons with special needs or incomes below 20% of the area median income.

CSH’s latest analysis, 2016 LIHTC Policies Promoting Supportive Housing & Recommendations for 2017-2018, also found that:

· Seventeen agencies promote supportive housing with set-asides of credit authority, the same number as in 2015. Idaho added a $570,000 set-aside. Iowa added an $80,000 set-aside. Nevada eliminated its $1 million veterans’ supportive housing set-aside. Mississippi eliminated a $500,000 set-aside that could have been used for elderly, disabled, or veterans’ projects;

· At least 11 allocation plans promote policies to leverage and maximize rental subsidies, including the Sec. 811 Project Rental Assistance Program. Pennsylvania and Mississippi are two states that provide incentives for developers to capitalize rental subsidy reserves held by the housing project;

· As federal attention shifts from ending veteran homelessness to ending family homelessness, a number of states are winding down veteran-focused priorities. However, conversations are ongoing about how to appropriately target supportive housing resources to families. Alabama, New Jersey, and New Mexico award points for developments serving homeless families; and

· Thirty-one LIHTC agencies provide early or additional access to agency resources to supportive housing projects in their QAPs. For example, New York offers notable new resources for supportive housing as part of a coordinated statewide plan.

CSH is starting to see HFAs taking a more holistic approach to providing supportive housing, Bilger says, explaining that they are adopting policies that seek to address rental assistance, supportive services, and other capital dollars. All are critical pieces to a supportive housing development.

In addition to analyzing recent QAPs, CSH officials make several recommendations for 2017 and 2018, including calling for more coordinated funding to strengthen the financial feasibility of supportive housing developments.

While QAPs deal exclusively with the allocation of LIHTC capital, there are creative ways for HFAs to leverage resources to help finance services that are an important component of supportive housing.

The study notes that Pennsylvania uses a 30% credit boost to incentivize developers to create a financial reserve for operating subsidies and service funding. Delaware, District of Columbia, Nebraska, and other states offer points for developments that incorporate services in the development plan. “Almost all of the housing credit agencies provide points for developments that bring operating or rent subsidies,” according to CSH.

The organization also continues to advocate that HFAs support and take on “a convener role” with other funders to create consolidated requests for proposals where capital, operating, and service funding can be precommitted.