Shaping a Healthier LIHTC Housing Stock: Examining the Role of States’ Qualified Allocation Plans

Abstract

The physical environment has a powerful impact on our physical and mental health, especially in our homes. One vehicle for advancing a healthier affordable housing stock is the Low-Income Housing Tax Credit (LIHTC). The aim of this research was to examine the manner and extent to which various housing quality provisions pertaining to health are embedded in the Qualified Allocation Plan (QAP) of the LIHTC program. From content analysis of the QAP of each of the 50 states and a survey of state housing finance agencies (HFAs), results revealed that: the most frequently required healthy housing provisions address housing quality, whereas the most incentivized ones address proximity to neighborhood services and amenities; few states bundle high-priority provisions relevant to asthma, respiratory health and toxic exposures, which are major health concerns for vulnerable children; the top two motivators for considering healthy housing provisions in the LIHTC process were “championship and initiation by agency staff” and “learning of similar practices in other states”; among other findings. Recommendations are made for HFA practices, and directions for future research are proposed.

Keywords:

• Low-Income Housing Tax Credit
• housing quality
• healthy housing

Disclosure Statement

No potential conflict of interest was reported by the authors.

Acknowledgments

Our advisory team was indispensable for bouncing ideas off, rereading drafts, and gaining insight. We appreciate the time, wisdom and effort of Anne Ray, Casius Pealer, Nancy Mueller, Holly Holtzen, Ingrid Gould Ellen, and Gina Ciganik. Jenifer Harrison turned several of our initial sketchy diagrams into graceful graphic displays. Comments and suggestions from the three journal reviewers helped sharpen and clarify our earlier draft. Support for this research was provided by the Robert Wood Johnson Foundation (Award ID #74031). The views expressed here do not necessarily reflect the views of the Foundation. In addition, we are also grateful for funding support of the Shimberg Center for Housing Studies at University of Florida, and the University of Illinois at Urbana-Champaign Provost’s Humanities and Social Science Faculty Funds.

Notes

1 Under this scope, universal design and Americans with Disabilities Act (ADA) building accessibility features would constitute elements of healthy housing, given their intent to ensure safe and equitable physical access within buildings and properties, and in many instances, minimize opportunities for falls, slips, and imbalance.

2 The LIHTC program, administrated jointly by the Internal Revenue Service (IRS) and state and local LIHTC-allocating agencies (e.g., HFAs), provides tax credits (i.e., dollar-for-dollar reduction of the tax liability of LIHTC investors) for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households, making it the most important source of funding for affordable housing in the United States today (HUD, 2019; United States Government Accountability Office, 2018). As of 2020, LIHTC cost the federal government an estimated $10.9 billion in forgone tax revenues (Keightly, 2021). Distribution of the state’s share of LIHTC tax credits is based on the state’s population (Gramlich, 2021).

3 This research focuses only on the states’ LIHTC administration. Other LIHTC-allocating agencies include Chicago, The District of Columbia, New York City, Guam, Northern Marianas, Puerto Rico, Samoa, and the Virgin Islands.

4 Generally, LIHTC subsidizes either 30% or 70% of a development’s low-income unit costs. The “4% credit,” typically used for acquisition/rehabilitation projects and new construction financed with additional subsidies (e.g., tax-exempt bonds), covers a 30% subsidy. Primarily used for new construction without additional federal subsidies, the “9% credit” covers a 70% subsidy. Awards of the 9% LIHTCs are much more competitive than the 4% ones.

5 HUD (2019) reported that in 2017 43% of LIHTC households had income of 30% or less of the area median gross income, or AMGI (labeled extremely low-income or ELI) as compared to about 25% of all renter households (National Low Income Housing Coalition [NLIHC], 2020). Likewise, 78% of LIHTC households had income of 50% or less of AMGI, and 90% had income of 60% or less. With rents on restricted units set to be affordable to households earning 50% or 60% of AMGI, the 62% of LIHTC households earning 40% of AMGI or less are eligible for monthly rental assistance and about 40% of LIHTC tenant households receive monthly federal rental assistance, most from a variety of HUD rental assistance programs (HUD, 2019).

6 Despite noted underreporting, HUD (2019) data show that 31% of LIHTC household heads are Black or African American, compared to 13% of all U.S. household heads; 17% of LIHTC household heads are Hispanic compared to 13% percent of all U.S. household heads. Black households account for 26% of all ELI renter households whereas Hispanic households comprise 21% of all ELI renter households (NLIHC, 2020).

7 Among renter households, those over 62, those who have a disability, and those with at least one member under age 18 are concentrated among ELI renters (NLIHC, 2020). HUD (2019) reports that more than 31% of LIHTC households had a head 62 or older (compared to 18% of all renter households); nearly 33% had at least one member under age 18 (compared to 30% of all renter households). Although LIHTC tenants are not required to report a disability, just over 12% of LIHTC households reported at least one member as disabled (compared to 9% of all renter households) (HUD, 2019; NLIHC, 2020).

8 Defined as permanent housing with attached intensive services targeted to populations with special needs who otherwise are challenged to keep stable housing (CSH, 2017).

9 Other authors offer broad categorizations of HQ–health connections; Jacobs (2011) discusses households generally, whereas Dunn (2020) focuses on HQ and health links particularly salient for children’s development, and Ellen and Glied (2015) address neighborhood conditions that influence children’s health. A group of literature reviews focus on design and construction characteristics of the dwelling and immediate residential infrastructure that impact occupant health (Bipartisan Policy Center, 2016; Buckner-Brown et al., 2014; Coley et al., 2013; Housing Matters, 2015; Jacobs et al., 2009; Jacobs et al., 2010; Leventhal & Newman, 2010; Morley et al., 2010; Wu et al., 2007). Other literature reviews address housing locational factors in relation to food outlets; social, recreational., and healthcare services; and outdoor environmental hazards (Dannenberg et al., 2011; Frank et al., 2003; Health Effects Institute, 2010; Johnson et al., 2016; Leventhal & Brooks-Gunn, 2003; Mair et al., 2010; National Research Council, 2010; Walker et al., 2010; Wheeler et al., 2015). There is also a burgeoning literature linking housing conditions and occupant health in non-North American, non-European countries (e.g., Selçuk et al., 2021). Because our focus is on affordable housing in the United States, we did not incorporate specific healthy housing criteria from that literature.

10 Novogradac is a national professional service organization and is known for its expertise in the LIHTC program. They publish an online resource center which includes all 50 states’ HFA website links in one place (Novogradac, n.d.a).

11 For brevity in this article, we refer to the actual QAP and all such affiliated state documents as “QAPs.”

12 Often a criterion (or provision, or precondition) of one source was included in the other two sources. Still, there were many instances in which a criterion was unique to a single source. Because this study’s aim was to provide a descriptive portrait of the current state of healthy housing provisions in states’ QAPs, we chose to include both shared and unique criteria in our HH Checklist. According to the source material, the provisions in these three sources are based on research evidence or research literature. A fourth relevant source of healthy housing criteria, Fitwel (CFAD, 2021), was under development and not publicly available at the time of this research.

13 This 2019 reference contains the provisions from the June 2015 WELL for Multifamily preconditions we referenced in our Checklist, as well as addenda through first quarter of 2019. The addenda were not used in developing our Checklist.

14 After the collection of data for of all states, the research team reviewed all “Other” items that coders had identified, and collectively decided to include four additional provisions in the Checklist.

15 The wording of the provisions in the Appendix has been shortened here for publishing purposes. For example, the Appendix provision “Proximity to services” is shortened from the full provision in the HH Checklist: “Locate the project within a 0.5-mile walk distance of at least four, or a 1-mile walk distance of at least seven, of the listed services [followed by a list of 26 amenities, retail and community and civic facilities]. For projects that qualify as Rural/Tribal/Small Town, locate the project within 5 miles of at least four of the listed services.” Another provision in the Appendix, “heating and equipment cooling sizing,” refers to the HH Checklist provision “Size and select heating and cooling equipment in accordance with the Air Conditioning Contractors of America (ACCA) Manuals J and S or ASHRAE handbooks.” The full desription of the provisions is available upon request from the authors.

16 For the focus of this article, we are not considering the GBCs in our analyses or research questions. Implications of this, and potential future research endeavors, are identified in the Discussion.

17 Given that our sample for the content analysis consisted of the entire population (all 50 states), we used descriptive statistics for content analysis. We used both Microsoft Excel and SPSS software for analyses.

18 We refer to these as “systems,” as the term is commonly used in the architecture and construction industry to denote mechanisms and techniques sharing common functions. We recognize the term is used differently in public health and the social sciences, but its usage seems appropriate in this research, given the focus on HQ criteria.

19 Due to assurances made to survey respondents of confidentiality and anonymity, we are unable at this time to reveal specific descriptive information of HFAs or how HFA survey responses correspond to respective state QAPs.

Additional information

Notes on contributors

Sherry Ahrentzen

Sherry Ahrentzen is Professor Emeritus of the Shimberg Center for Housing Studies, University of Florida. Her research focuses on housing and community design that fosters the physical, social and economic health of households.

Lynne Dearborn

Lynne Dearborn is Professor of Architecture at the University of Illinois at Urbana-Champaign. She studies the impact of neighborhood and housing conditions on residents’ quality of life. Her research focuses on the physical characteristics of rental housing for low- and moderate-income households.

Ali Momen-Heravi

Ali Momen-Heravi is a Ph.D. Candidate in Architecture at the University of Illinois at Urbana-Champaign. His doctorate research focuses on innovations in environmental design policy and practice that can impact the psychological wellbeing of affordable housing residents. He currently serves as Einhorn Yaffee Prescott’s 2022 Tradewell Fellow.

Arezou Sadoughi

Arezou Sadoughi is an Assistant Professor of Building Science at Appalachian State University. Her expertise within the spectrum of building design and construction covers the intersection of architectural, structural, and occupant health studies, for multi-family housing in the United States. She currently studies new design solutions with mass timber for volumetric modular construction, particularly midrise multi-family housing.