Who Gives a QAP? Why Non-housers Should Care About Their Local Qualified Allocation Plan

Have you read your state’s qualified Allocation Plan (QAP)? The QAP is a document created by each state and local housing finance agency (HFA) that acts as a blueprint for allocating credits to proposed affordable housing developments.

Though affordable housing developers often read and provide input to their local QAP, very few people outside the housing world know about them. Yet, the QAP can be a critical tool for people in other sectors, including health, climate, and education, to encourage housing development that meets the needs of their clients and constituents. 

What is the QAP? 

The federal Low-Income Housing Tax Credit (LIHTC) (PDF) is a tax incentive program that encourages the construction and preservation of affordable rental housing by helping developers offset development costs. Though some requirements for LIHTC development are standardized nationally (PDF), such as requirements for affordability, states are encouraged to distribute credits in ways that most effectively meet their specific local housing needs.

In part because the limited number of credits available each year does not meet the demand, states establish detailed selection criteria to allocate credits to encourage developers to put forth housing proposals that meet as many of the state’s needs as possible. Because the needs of each state vary considerably, criteria and requirements can be wide-ranging but generally focus on where housing is built, how it should be constructed or operated, which populations should be prioritized, and what services or amenities should be included. Criteria generally are encoded using thresholds, set-asides, and competitive points. What does this mean?

• Thresholds are minimum requirements for development. For example, a state could require a proposed property to meet LEED (Leadership in Energy and Environmental Design) or Enterprise’s Green Communities certification to be considered, or it must have a certain number of units for households with extremely low incomes.
• Set-asides reserve credits for specific types of development or target populations. Some states have set-asides of dollars or credits for permanent supportive housing intended for people who many need additional services or to reserve a specific credit amount for properties in rural areas.
• Competitive points are awarded for proposed properties with specific features. A QAP may award more points for a proposed development within .25 miles of a grocery store than a proposed property 1 mile from a grocery store or award 10 points to projects with units for special needs populations.

Why does the QAP matter? 

The LIHTC is currently the largest driver of affordable housing construction in the US, funding the construction of hundreds of affordable properties a year. As such, the requirements in QAPs influence the nation’s affordable rental housing and what affordable developers are incentivized to focus on in their development of this housing. In this way, the QAP provides avenues for addressing issues within education, health, climate, and justice, among many others.

For example, housing development can negatively affect the climate through sprawling development and unsustainable building practices, but QAPs can require or encourage different types of environmentally friendly design. Most states already require some certification of green building (PDF), such as LEED or Enterprise, with some states like California and Illinois encouraging different sustainability design through incentivizing Passivehaus construction. Similarly, many states encourage development within a certain range of transit hubs, bus stops, business centers, and other areas that may reduce the need for automobiles and encourage density instead of sprawl. Ohio’s 2022–23 QAP offers either one, three, or five points for proposals located within a region of high-transit density, defined by Center for Neighborhood Technology’s Transportation Connectivity Index.

Similarly, educators may find the QAP helps address racial and economic segregation. Though LIHTC developments must still overcome single-family zoning and NIMBYism, they are powerful tools to encourage siting of affordable housing within high-performing school districts. Texas’s 2022 QAP provides one competitive point for a proposed property located in the attendance zone of a general enrollment public school rated A or B, whereas Massachusetts’ 2020–21 QAP (PDF) awards up to 8 points for proposed developments in strong school districts, defined as the percentage of 10th grade students who score in the advanced or proficient categories using an average of the three Massachusetts Comprehensive Assessment System tests: English language arts, mathematics, and science and technology engineering. Both whether and how QAPs include a focus on education varies substantially and may be better influenced by people working with school districts, departments of education, and other education-focused groups.

There are multiple other components captured in QAPs, ranging from proximity to grocery stores to air quality standards that signal the importance of the QAP for groups working outside of housing.

How can you get involved? 

First, stakeholders in nonhousing fields should regularly review the QAP to understand what provisions exist, or are absent, in their local QAP that relate to their sector. Though QAPs tend to be relatively long, comparing several can exemplify innovative ways to encourage new education, health, climate, or justice provisions. Each state receives a new allocation of LIHTCs each year, and QAPs are usually drafted annually or semiannually.

Second, stakeholders could consider providing input and giving feedback to the QAP. Allocating agencies are generally required to have a public hearing (either in person or virtually) and an open comment period that allow advocates and local organizations to respond to proposed QAP inclusions. This is when stakeholders can provide comments on priority areas, specific set-asides, and competitive criteria. Stakeholders working on climate may encourage allocating agencies to incentivize properties to be sustainably designed and constructed, be built in places that encourage transit use, or reduce reliance on cars. An education stakeholder may consider providing feedback on how “quality schools” are defined and what requirements could encourage housing development in school areas.

Third, stakeholders ought to establish relationships with their HFA that go beyond the QAP. The allocating agency varies by state, but the state’s HFA is most likely the primary organization responsible for the QAP and for regional affordable housing development. The development of a QAP is a long, detailed process, so stakeholders should consider contacting and engaging the HFA before the first draft of the QAP and for the long-term.

Fourth, stakeholders can strategize around including their priorities. Though competitive points can incentivize certain development components, the uptake for nonmandatory features will depend on the weight of points granted. Stakeholders should consider proposing solutions that are reasonable, given the many competing needs within a QAP, but also impactful. Are there current optional features that can encourage an HFA to shift an incentive to a requirement? Are there ways to provide more competitive points for properties that invest in education or focus on housing people with justice involvement?

By building relationships with the HFA and gaining a deeper understanding of the QAP as a tool for encouraging affordable development, stakeholders in other sectors can more effectively build connections with housing to improve outcomes.