Five QAP Changes That Can Increase Supportive Housing

According to the Corporation for Supportive Housing (CSH), there’s an estimated 1.125 million supportive housing units needed nationwide. In a recent report entitled “Optimizing Qualified Allocation Plans for Supportive Housing 2018–2019,” CSH pointed out that each year states have the opportunity to support vulnerable individuals by prioritizing the development of supportive housing—safe, stable, affordable units with access to wraparound services—as part of their Qualified Allocation Plan (QAP), the rules that guide the allocation of their LIHTCs.

In 2018, all states and territories included at least one method for incentivizing housing for vulnerable individuals and families in their QAPs. Up to 85 percent of states use the QAP to create housing for vulnerable individuals, and just under two-thirds also consider the types of service enrichments that can be made available on-site or in the nearby community, according to a CSH’s analysis. CSH points out that housing finance agencies (HFAs) often go beyond the statutory requirements of the federal LIHTC program. However, the degree to which they prioritize supportive housing varies greatly from state to state, and more can be done to help create supportive housing.

CSH offers the following five recommendations HFAs can take to develop a supportive housing pipeline:

Prioritize threshold and set-aside requirements. Although many HFAs use threshold (63 percent of states) and set-aside (50 percent of states) requirements, 93 percent create scoring incentives that provide varying numbers of points for integrating specified categories. The difference is even greater within categories that prioritize vulnerable individuals served by supportive housing, with under half of states putting forth specific requirements compared to 85 percent using scoring incentives. It’s hard to determine just how meaningful individual points are when compared against the total score needed to receive a tax credit award. As such, HFAs must prioritize threshold and set-aside requirements to ensure enough units are dedicated to those who need them most.

Include requirements for extremely low-income units. Supportive housing households typically include individuals and families with extremely low incomes at or below 30 percent of area median income (AMI). While 81 percent of HFA encourage the development of units for those at or below 30 percent through scoring incentives, less than 10 percent actually require consideration for this cohort. While establishing lower income limits isn’t sufficient by itself to meet the definition of supportive housing, it’s important for HFAs to recognize how the lower income limits fit within the ranges of affordability and designate units specifically to meet the needs of low incomes at or below 30 percent of AMI.

Allocate tax credits for supportive housing. Only four QAPs reserve a designated amount of tax credit allocations explicitly for the purpose of supportive housing. These amounts range between 5 percent and 30 percent of the total LIHTC available in the state. While the vast majority of QAPs incentivize housing for vulnerable individuals and/or families, CSH believes it’s important for HFAs to recognize that supportive housing ensures accesses to both affordable housing and support services.

Include accessible service enrichments. Supportive housing is most effective when it features close coordination of housing, support services, and property and housing management. Approximately two-thirds of HFAs incentivize service enrichments, with about a third of those required through thresholds and set-asides. Services should be flexible, voluntary, and offer a comprehensive array of support. Services that help tenants sustain housing stability and meet life goals are best.

CSH says HFAs should request a social service plan (SSP) that outlines the intended services, description of source funding, length of funding, and evidence of sustainable funding beyond the current timeline. The service provider listed on the SSP should also provide evidence of experience serving the intended tenant population and an understanding of the community that the housing development will serve.

Adopt dimensions of quality. To ensure supportive housing maintains a level of quality, HFA should require applicants to integrate the dimensions of quality into their development. Quality supportive housing is housing that is: (1) tenant-centered; (2) easily accessible to tenants of all backgrounds; (3) coordinated among housing partners with a shared goal; (4) integrated with voluntary services and community connections; and (5) sustainable over time. HFAs can integrate these dimensions of quality into the QAP process by requiring developers to, at minimum, submit a Commitment to Quality checklist as part of the application. By making this commitment, the applicant affirms that each project partner named in the application understands and commits to implementing the project in way that’s consistent with the quality standards. HFAs may also require applicants to submit a quality endorsement; which is a third-party review of supporting housing project plans to determine if they meet national quality standards.