HUD Releases New 2011 Designations for DDAs

HUD’s Office for Policy Development and Research has just released new designations for Difficult Development Areas (DDAs) for 2011, but said that designations of Qualified Census Tracts (QCTs) under IRC Section 42, and published October 6, 2009, will remain in effect.

Low-income housing tax credit (LIHTC) developers use the QCT and DDA designations when building or rehabilitating multifamily rental housing to claim 30 percent more in tax credits than would be available to the same projects outside of these areas.

A DDA is any area that is designated by HUD that “has high construction, land, and utility costs relative to the area media gross income.” QCTs are census tracts in which one-half or more of the households have incomes below 60 percent of the area median income or the poverty rate is 25 percent or higher. According to HUD, a 20 percent population cap in each metropolitan area or nonmetropolitan part of a state limits the designation of eligible census tracts as QCTs.

According to the notice in the Federal Register (FR-5432), published September 9, 2010, Gulf Opportunity Zone DDA designations will expire on December 31, 2010 and will not be in effect in 2011.