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114 Different QAP Criteria (post 8 of 10)
This post is part of a series on QAPs:
- Selection Criteria
- Creating a Competition
- Special Case of Cost Policies
- 114 Different Criteria
- Drafting Considerations
- Providing Effective Input
This post is a compilation of policies used by one or more allocating agencies. Most could exist as a set-aside, threshold requirement, selection criterion, and/or underwriting standard. The list is separated into categories using the familiar “who, what, when, where, why and how” convention. However there is no “why,” but instead second groupings of “who” and “what” items, plus a miscellaneous “other” collection.
Being included in this list is absolutely not an endorsement. Some items create practical problems or even raise legal concerns.
Very many of the criteria require making a choice about where to fall on the continuum of complexity:
- on one end, the rule is very easy/simple to implement and risks being often wrong,
- on the other, the rule is very complicated to administer but almost always right.
For example, a uniform statewide standard versus one applied differently for each separate parcel.
Who. Population targeted/housed (POP)
Grouping includes criteria that: relate to characteristics of the households intended to occupy some or all of the development units.
Not addressed: is whether these policies are a preference or occupancy requirement, which matters from both from a practical and legal perspective.
Criteria in this grouping also listed in another: #67, #92, #93, #100, #112, #113
- income targeting below 60% of the area median income (AMI) (e.g., 30% AMI) POP
- rents set at levels below 60% AMI (e.g., 30% AMI) POP, OTHER
- connection to Section 8 waitlist POP
- large families (e.g., three-plus bedroom) POP
- family in general (open occupancy) POP
- elderly (age-restricted) POP
- people with disabilities in general POP
- specific disability types (e.g., mobility impaired, mental illness) POP
- specific relationships (e.g., custodial grandparents) POP
- people experiencing homelessness POP
- young adults aged out of foster care POP
- victims of domestic violence POP
- veterans POP
- policies relating to credit, eviction, and/or criminal background screening POP
- some units targeted to one or more populations listed in numbers 7 to 14 above POP
- all units targeted to one or more populations listed in numbers 7 to 14 above POP
- mixed-income with unrestricted, “market rate” units POP
- mixed-income with both 60% AMI and deeper targeting POP
- certain occupations (e.g., artists, farmworkers) POP
- “workforce” housing, however defined POP
- residents currently living in a particular city/county POP
- Native American/tribal land POP, WHO, LOC
- transitional housing POP
- efficiencies, single room occupancy, or studios POP, DESIGN
- assisted living POP, DESIGN
Second Who. Participants involved (WHO)
Grouping includes criteria that: cover those who develop, own or manage.
Not addressed is: exactly how the participants are involved; can be as the developer, general partner, or consultant.
Criteria in this grouping also listed in another: #22
- entities based locally or in-state WHO
- entities with in-state experience, regardless of where based WHO
- for-profit developers/owners WHO
- nonprofits WHO
- certain types of nonprofits (e.g., community housing development organizations, community development corporations) WHO
- public housing authorities WHO
- right of first refusal other than list item #61 WHO
- minority/women-owned businesses WHO
- developers’ financial capacity WHO
- extent of developers’ experience in rental housing and/or subsidy programs WHO
- extent of developers’ experience specifically in LIHTCs WHO
- extent of management agents’ experience in rental housing and/or subsidy programs WHO
- extent of management agents’ experience specifically in LIHTCs WHO
- building capacity for those without experience in LIHTCs WHO
- joint venture development or co-managing WHO
- amount of LIHTCs awarded per principal in a cycle WHO
- negative development/compliance history in other programs WHO
- negative development/compliance history in LIHTCs WHO
- relationship between real estate buyer and seller (e.g., identity of interest) WHO
What. Design and costs (DESIGN)
Grouping includes criteria that: describe the housing’s physical structure, design characteristics, or uses of capital funds.
Not addressed is: working with existing housing, as that is covered in the next category.
Criteria in this grouping also listed in another: #24, #25
- new construction in general DESIGN
- number of units (e.g., encouraging less than 50, maximum of 200) DESIGN
- budgeted construction costs per unit or square foot DESIGN
- eligible basis per unit or square foot DESIGN, FUND
- lower soft costs (e.g., intermediary, developer/consultant fees) DESIGN, OTHER
- particular unit characteristics (e.g., square feet, washer/dryer, high-speed internet) DESIGN
- property amenities (e.g., playground, community room) DESIGN
- property appearance (e.g., brick veneer, broken roof lines) DESIGN
- how buildings relate to the site and/or surroundings (e.g., layout, wetlands, design compatibility with neighbors) DESIGN
- more features for physical accessibility (e.g., curbless showers) and/or greater number of accessible units) DESIGN
- mixed use in general DESIGN
- certain nonresidential uses in addition to basic common areas (e.g., day care) DESIGN
- “green” design, construction, and/or siting (e.g., Energy Star, solar, near transit) DESIGN, LOC
- adaptive re-use of historic buildings DESIGN
- scattered site DESIGN
- single family detached houses or duplexes DESIGN
- eventual homeownership/lease-purchase DESIGN, OTHER
Second What. Existing housing (REHAB)
Grouping includes criteria that: describe considerations for the rehabilitation/preservation of existing housing units. Many of these could be in Design above, but together are sufficiently numerous and distinct to justify a separate category.
Not addressed is: who conducts the physical needs assessment and the standards used.
Criteria in this grouping also listed in another: none
- rehabilitation or preservation in general REHAB
- extent of buildings’ need for rehabilitation work REHAB
- amount of rehabilitation work proposed REHAB
- risk of opting out of affordability REHAB
- age of development/when placed in service REHAB
- number of tenants to be permanently relocated REHAB, POP
- number of households with tenant vouchers or units with project-based operating assistance REHAB, FUND
- capital funds from a federal program REHAB, FUND
- state appropriated capital funds REHAB, FUND
- older LIHTC properties, including those at Y15 REHAB
When. Time for construction and being in program (TIME)
Grouping includes criteria that: apply to the development process or duration of program restrictions. There are only a few items because both are largely governed by Section 42.
Not addressed are: interim deadlines between award and being placed in service.
Criteria in this grouping also listed in another: 108
- readiness to proceed (e.g., permits in place) TIME
- duration of the extended use period (e.g., 55 years) TIME
- waiver of the qualified contract option TIME
- disaster rebuilding TIME, LOC
Where. Geographic location (LOC)
Grouping includes criteria that: could be determined with a map and data or opinions.
Not addressed is: who determines subjective considerations, such strength of the market.
Criteria in this grouping also listed in another: #22, #57, #75
- certain geographic regions within a state LOC
- rural areas/small towns LOC
- downtowns/central business districts LOC
- community revitalization areas LOC
- Qualified census tracts and/or difficult to develop areas LOC
- other local, state or federally designated areas (e.g., Empowerment Zones) LOC
- high or low poverty areas LOC
- promoting racial diversity LOC
- high-cost, supply-constrained cities/areas LOC
- near bus or mass transit stops LOC
- proximity to certain amenities (e.g., schools, grocery stores) LOC
- area economic trends (e.g., growth or decline) LOC
- area land use pattern (e.g., residential or not) LOC
- lack of problematic area characteristics (e.g., junkyards) LOC
- lack of problematic site characteristics (e.g., underground tanks) LOC
- distance to other LIHTC properties or number of units/properties within a particular jurisdiction LOC
- in strong markets, or how the unit mix/targeting fits the market POP, LOC
- absence of market problems (e.g., high capture rate, effect on other LIHTC properties) POP, LOC
- housing needs statistics (e.g., overcrowding, cost burden) LOC
- area median income relative to that of a larger area (e.g., Census tract and county) LOC
How. Sources of funds (FUND)
Grouping includes criteria that: describe different types of capital sources and operating subsidies.
Not addressed are: guarantees.
Criteria in this grouping also listed in another: #48, #68, #69, #70
- loans from state agencies FUND
- loans from local governments FUND
- other local government contribution (e.g., donated land, waived fees) FUND
- public housing authority capital FUND
- specialized funding sources (e.g., HUD 202, NAHASDA) POP, FUND
- other sources below market loans (e.g., FHLB, NeighborWorks) FUND
- amount of deferred developer fee (maximum or encouraging more) FUND
- project-based operating contract (e.g., Section 8, Annual Contributions Contract) FUND
- historic rehabilitation tax credit equity FUND
- amount of LIHTCs per unit or award FUND
- anticipated LIHTC equity price FUND
- previously awarded developments that need additional LIHTCs FUND
- previously awarded developments that need additional time to place in service (“recycled” allocation) TIME, FUND
Other policy goals. - Miscellaneous (OTHER)
Grouping includes criteria that: involve considerations not adequately addressed other categories.
Criteria in this grouping listed in another: #2, #49, #61
- short and long-term financial feasibility (e.g., minimum debt coverage ratio) OTHER
- coordination with Consolidated Plan OTHER
- politically endorsed by a local government OTHER
- connection to supportive services OTHER, WHO
- tenants’ participation in services is not a requirement of occupancy OTHER, WHO
- lottery OTHER
The list is not meant to increase the complexity of QAPs. Rather, its purpose is to move forward the dialogue of LIHTC policy in two related ways.
First, those advocating for causes will have a better idea of the complexity involved in QAP drafting. While their particular issue(s) may seem paramount, there are many, many others for allocating agencies to evaluate with their limited staff time.
Another way in which this post may advance the discussion is to help those involved in QAPs think about them differently. The people involved include all interested parties, not just state decision-makers. LIHTC policy is ultimately a collective process. Allocating agencies need constructive input from a wide variety of program participants in order to continually improve outcomes.