What the QAP Scoring System Reveals about Government Preferences for Development
By DCI | Redevelopment & Revitalization | Nov 9th
The deadline for the submission of applications for Indiana Low Income Housing Tax Credits passed yesterday, and with it, a collective sigh of relief from all those who have been devoted to the application for the last few months. However, the work of Indiana developers is not done. After the submission, these firms move more deeply into the planning and development phase, completing the rest of their to-do lists. As these firms continue work on their projects, most are missing a key piece of the process, not realizing the application is still not finished. This part of the application process was not written in the QAP the respective threshold requirements or evaluation criteria, but it might be the most important part: documenting the learning process.
An affordable housing development
The QAP, which is short for Qualified Allocation Plan, is the document which lays out all of the guidelines for the submission of Low Income Housing Tax Credits (LIHTC). These tax credits can be a significant resource in the development of affordable housing, but the guidelines in the QAP must be followed religiously in order to receive them. As such, developers read the QAP fervently making sure to meet its requirements to score as many points as possible, in as many categories as possible, so their applications may be one of the chosen. But the QAP is more than just a list of requirements. If one reads between the lines, you realize that the QAP ultimately deals with values. That is, each requirement and scoring criterion exists for a reason and represents State government’s preferences for development. Once you realize this fact, the key question evolves from “What do I need to do to get these tax credits?” to “What does my State government value, and how can I be more effective within this value system?” DCI maintains that spending time trying to answer this question and reflecting on the application process can streamline tax credit applications in the future and build capacity within the development firm itself.
Each State has its own QAP reflecting its own values, but a brief study of the Indiana QAP may help to illustrate our assertion. So what does the State of Indiana value, as revealed by its QAP? A few values stand out predominantly.
- · One key priority of the Indiana Housing and Community Development Authority (IHCDA) is to support comprehensive community development. This value is listed as both a top priority and a goal of IHCDA in the QAP. This value is supported by application elements that offer extra points for infill development in existing neighborhoods, redeveloping brownfield sites, promoting neighborhood stabilization, inclusion in a local redevelopment plan, being in a federally-assisted revitalization award area, providing nearby off-site improvements or amenities and facility investments, having a strong tenant investment plan providing linkages between tenants and supportive services, entertainment, and engagement opportunities. Additionally, 10% of the tax credit funds are set aside for developments that make a positive community impact by being part of a broader or comprehensive program of neighborhood improvement and having the capability to fundamentally change the character of a neighborhood. Developments that are part of a comprehensive phased development and show continued commitment to that neighborhood also receive extra points. Finally, one of the Authority’s housing goals is to support developments that are located in Qualified Census Tracts and/or difficult to develop areas which can also provide additional points in your application.
- Another key priority of IHCDA is to support tenants with special housing needs, particularly the elderly, and to support aging in place. This priority is found throughout the QAP and is listed in the Authority’s housing goals, priorities, and requirements for a tenant investment plan. (The entire third level of this tenant investment plan deals with community enhancement to encourage aging in place). Another 10% of tax credit funds are set aside for developments providing 100% accessible or adaptable units dedicated to the elderly.
- A third preference of IHCDA is to support development that preserves existing low income housing or housing that minimizes the displacement of tenants. These elements offer extra points to developments that redevelop a vacant structure, support historic preservation, preserve existing affordable housing, provide an adaptive reuse to an existing structure, offer homeownership opportunities, or participate in preservation of community revitalization. This is accomplished by; 1) being an infill development that conforms to an existing neighborhood; 2) having rehabilitation represent 75% of the development; or 3) being included in a City or Town’s Revitalization Plan. Another 20% of tax credit funds are set aside for developments that involve substantial rehabilitation of an existing structure.
- One final value of IHCDA is to support high performance building. This element awards extra points for developments that employ high performance housing characteristics such as high energy efficiency, provide smart use training to tenants on efficient use of resources and utilities, have building certifications such as LEED, or have other unique features. Additionally, more points are given to developments with a high level of amenities. These can include entertainment-related amenities such as playgrounds or picnic areas, interior architectural amenities such as wooden floors, or security amenities such as well-lighted parking lots and restricted access. Finally, more points are given to developments that score the highest for inclusion of universal design features that maximize the accessibility in the development.
Comprehensive community development, opportunities for elderly housing and aging in place, preserving low income housing and minimizing displacement of existing tenants, and high performance building characteristics are the key values of the Indiana Housing and Community Development Authority. These values work to achieve IHCDA’s ultimate objective, which is to increase the overall impact of tax credit development using the tools above. If IHCDA’s objective is reached, the tax credits will not only result in affordable housing but also in additional investment around that housing, forming a comprehensive neighborhood with services and opportunities for continuous engagement in the wider community.
There are many ways for us to include IHCDA’s development preferences in our developments and just as many submittal requirements in order to receive the points for them. However, beyond the required maps, data, and narratives there exists a larger picture that can refine the long-term objectives of our development firms. That is, by embracing developments that are environmentally-friendly, community-centered, and committed to the long-term well-being of the neighborhood, we can move beyond thinking about what we need to do to finish the application and start thinking about how we need to do development in general. This change in philosophy can help us increase success with our IHCDA applications, our developments in general, and most importantly our communities.
