Climate Resiliency Incentives in LIHTC Qualified Allocation Plans
Between 1980 and 2021, the United States experienced 323 large-scale natural disasters that resulted in over $2.1 trillion of damage. With the increasing severity and cost of disasters comes an increased focus on climate resiliency of the existing housing stock and new construction.
In our 2021 Duty to Serve report, Resiliency Efforts in Affordable Multifamily Housing, we examined climate resiliency and how public and private programs can improve climate resiliency of affordable housing. In this report, we take a deeper look at how climate resiliency measures are factored into the federal Low-Income Housing Tax Credit (LIHTC) program, which supports the development and rehabilitation of affordable housing.
The LIHTC program administers tax credits to affordable housing projects through each state’s Qualified Allocation Plan (QAP). The scale of the program is expansive: Since 1987, the LIHTC program has financed 3.6 million affordable units. State QAPs influence these properties by incentivizing a variety of public policy priorities, such as climate resiliency. Researching the provisions in LIHTC QAPs can provide insight on how to increase resiliency for low-income renters while maintaining affordability. A property with resilient improvements and design has a greater likelihood of withstanding a natural disaster. This allows more residents to remain safe in their homes and lowers the risk of tenant displacement and the need for temporary housing. In this report, we analyze all 50 states and Washington, D.C.’s LIHTC QAPs and identify different resiliency approaches that 1) mitigate the effect of disasters (hazard-resistance) and/or 2) bolster recovery efforts (recovery) after disasters occur.
In our research, we consolidate and synthesize information from LIHTC QAPs with the intention of identifying emerging trends on climate resiliency for affordable multifamily properties. We focus on identifying the two types of resiliency incentives mentioned in QAPs: hazard-resistant provisions (or “proactive” approaches) and recovery provisions (or “reactive” approaches). This research can serve as a tool for policymakers and stakeholders who are looking to increase property resiliency in support of low-income renters.