Report Grades State QAPs on Energy Efficiency, Racial Equity, Healthy Building Practices

The BlueGreen Alliance Foundation recently released a report that ranked all states based on their criteria for allocating LIHTCs through Qualified Allocation Plans (QAPs). The report scored each state based on how the states’ QAPs promoted healthy building practices, energy efficiency, and racial equity.

States have broad discretion in administering QAPs and determining the importance of criteria within the document. States structure QAPs around several categories:

• Eligibility requirements;
• Points via a state-designed scoring system;
• Credit set-asides; and
• Basis points.

Each year or two a state will revise its QAP and offer an opportunity for public comments, with the finalized draft then approved by the housing finance agency’s board and signed by the governor. Affordable housing developers will then apply for the tax credits, and the state agency will review and award the credits to applicants that meet the QAP’s threshold requirements and/or achieve the highest scores based upon the state’s criteria. According to the report, QAPs serve as a valuable tool to advance progressive solutions in affordable housing.

Score categories. Healthy building practices refer to the products and materials chosen to build homes with attention paid to limiting chemicals known or suspected to have short-term effects or cause long-term health conditions. And improved energy efficiency in buildings refers to practices such as air sealing and insulation that lowers energy bills, increases a building’s durability, and creates a healthier indoor environment by optimizing humidity and temperature levels.

With the racial equity scoring category, the report highlights the fact that a majority of low-income renters are people of color and an estimated 30 million affordable housing units are considered substandard because of physical and health hazards. For this, criteria within QAPs can include measures to help alleviate racial disparities by prioritizing improvements in the lives of people of color.

Success factors. Much of the success from states with high scores is achieved through the inclusion of green building certifications, an area states have increased in utilization in recent years. The report finds that states continue to primarily rely on green building certifications to encourage affordable housing developers to use healthier building materials and consider the health of tenants in the development and preservation of housing projects.

The use of either low-VOC finishes/flooring or low-VOC paints/sealants is required in 20 states for new construction and in 15 states for moderate rehabilitation projects, far more than any other healthy building metric.

Racial equity challenges. The report also finds that much work needs to be done by states to confront existing systemic barriers that create inequalities for communities of color. No state achieved a score high enough to receive an “A” grade. While states scored well in incentivizing amenities like childcare or health services and developing multifamily properties in high-resource areas with schools and job opportunities, a majority of states don’t address issues such as tenant screening, community engagement, data accountability, and transparency of tenant demographics.

Top scorers. Overall, the District of Columbia, Illinois, Ohio, Oregon, and Washington had the highest cumulative scores. Illinois achieved the highest overall score, as its housing finance agency requires all projects to adhere to mandatory criteria of Enterprise Green Communities and includes provisions aimed at unit design, affirmative marketing, and significant incentives for minority and women-owned developers.