A new study ranks each state, Chicago, the District of Columbia, and New York City on their criteria for considering energy efficiency, health, and racial equity in their low-income housing tax credit programs.
The BlueGreen Alliance Foundation examined qualified allocation plans (QAPs) from around the country to learn their policies and encourage them to improve their program standards. The QAPs guide each jurisdiction’s LIHTC program and establish priorities for allocating the federal housing credits to affordable housing developers.
“QAPs serve as a valuable tool to advance progressive solutions in affordable housing,” said Jeff Hurley, BlueGreen Alliance Foundation state initiatives manager and report author. “This report shows there is significant room for improvement. I hope our findings will help improve states’ QAP requirements and affordable housing standards.”
The report found the locations with the highest overall scores in three categories were Illinois, Minnesota, Ohio, and the District of Columbia with an A-; Colorado, Michigan, Washington, and Oregon with a B+; and Delaware, Georgia, and Maryland with a B.
The report found the locations with the lowest overall scores were Maine, Kentucky, and Tennessee with an F, and Alaska, Alabama, Arkansas, California, Montana, North Carolina, Nebraska, Kansas, Oklahoma, West Virginia, and the city of Chicago with a D.
“Our findings show that while some states continue to make strides in considering energy efficiency and the health of occupants, others minimize their importance by not requiring LIHTC-financed properties to include these provisions or prioritize other housing needs,” according to the new report. “On racial equity, our research shows a majority of states address only a portion of areas that can reduce disparities and increase housing opportunities. Almost no states require or incentivize labor standards in their QAP and only encourage local sourcing or local hiring provisions.”Findings from “Building a Better Affordable Housing Future: How States Can Integrate Health, Energy Efficiency, Working Conditions, and Racial Equity in Their Qualified Allocation Plans” include:
· Healthy Building: “The states and cities with the highest scores were those who mandated green building certifications for both new construction and rehabilitation projects. Colorado, Washington, D.C., Georgia, Michigan, Minnesota, New York City, Ohio, Oregon, Washington, and Wisconsin all received high scores for including this requirement for all competitive projects,” says the report. “A state with a unique path to one of the top point totals in the scorecard is Idaho, which requires developments to meet several individual healthy building standards while incentivizing a third-party green building certification.”
· Energy Efficiency: Roughly a third of states require or incentivize projects to meet the criteria or achieve certification through green building standards. Eighteen states require or incentivize new-construction properties to improve energy performance through an Energy Star certification.
· Racial Equity: The study reports that no state or city scored an A within the racial equity criteria, and only 12 managed to score a B. This section looked at several different categories, including tenant screening and BIPOC developers and service providers . Only seven states achieved any of the criteria when it came to tenant screening. Ohio was one of the only two states that met each standard in this section. What makes Ohio’s QAP unique in this respect is it explicitly prohibits the denial of housing applicants on the basis of evictions and arrest records alone, and forbids developers from advertising that tenants with eviction history cannot apply. Furthermore, LIHTC developers in Ohio are not allowed to use eviction records or credit reports with a failure to pay rent or utilities during the COVID-19 emergency period to reject applicants, according to the study.
Nearly half of the entities have incentives, set-asides, or threshold requirements for BIPOC-owned or controlled developers and teams. The report points out that Chicago’s QAP includes a “preference for development teams with BIPOC-led developers, professional service teams and/ or service providers and for Joint Ventures or Partnerships that ensure small, BIPOC-led firms and nonprofits have material participation in a manner that promotes their growth.”
The report is available at https://buildingclean.org/qap-report.
The BlueGreen Alliance Foundation is a nonprofit that conducts research and educates the public about solutions to environmental challenges that create economic opportunities for Americans.
