Throughout the country,
low-income people with mobility disabilities face an
unprecedented and growing housing crisis. Accessibility and
housing costs rank high among the problems they face. Some live
in places where they must crawl up and down stairs to enter or
exit their homes. Many pay nearly 70 percent of their monthly
incomes to rent even these inaccessible housing units. Often
they are relegated to segregated housing with only other
disabled persons and/or elderly individuals as neighbors, or
they remain inappropriately housed in special facilities solely
because they cannot find affordable, accessible and integrated
housing.
There are some developers who are
building housing for people with disabilities, thanks to the
1990 Americans With Disabilities Act (ADA), which mandated that
all developers who receive public funding make 5 percent of the
housing units they build accessible. But that doesn't mean that
people who actually need the units are the ones living in them.
In many instances, if a disabled person is not quickly found,
units are rented to individuals who are income eligible but not
disabled.
While working with the disabled
community in Pennsylvania,
Regional Housing Legal Services
(RHLS) noticed this disconnect. (RHLS provides legal guidance
and representation primarily to CDCs engaged in affordable
housing and economic development projects.)
RHLS staff and disability
activists sought to encourage developers to build more
accessible units for individuals earning below 60 percent of
area median income (AMI). As a result of their efforts, the
Pennsylvania Housing Finance
Administration (PHFA),
which administers the state's Low Income Housing Tax Credit
program, added incentives to the program in 2005 to ensure that
a number of tax credit units be designated for the lowest-income
persons with disabilities. PHFA also worked with the
Pennsylvania Department of Public Welfare to bring awareness of
this opportunity to its clients with disabilities.
The Problem With LIHTC
Unfortunately,
all across the country low-income persons with disabilities have
not benefited from the LIHTC program. For several years federal
Supplemental Security Income (SSI) has been the sole source of
income for 40 percent of Americans with disabilities.
Individuals are eligible for $603 per month; couples, $904, well
below any area's median income. Despite the income being so low,
the federal government does not have LIHTC unit requirements for
people at that level. Though the Internal Revenue Service caps
the rents of tax credit units for those whose incomes are less
than 60 percent of AMI, this does not usually help very
low-income persons, as most LIHTC units are targeted to
households with incomes at or above 41 percent.
While the tax
credit program presents barriers to very low-income earners in
general, the obstacles to low-income people with physical
disabilities can be far greater. The federal government
distributes the roughly $3 billion set aside for LIHTC through
housing finance agencies like PHFA. There is always more demand
for credits than are available, so agencies award the credits
according to a Qualified Allocation Plan (QAP) that stipulates
the criteria developers must meet. Allocating agencies like PHFA
use their QAPs to promote workforce housing, green building,
public housing restructurings, senior housing and more.
Typically, developers with differing agendas (from using the
credits for neighborhood revitalization or to creating
affordable housing options in wealthier areas) seek to influence
what the QAP priorities will be (see SF #137).
Since the disabled community does not participate in the QAP
development process, it's unlikely the allocating agencies will
prioritize their needs.
Partly in
response to the ADA mandate, many states have required a
specific, though relatively low, percentage of their tax credit
units to be accessible to the low-income disabled population.
Other states have given extra points in the QAP process to
developers who will make a percentage of their units accessible,
but the units do not have to be affordable to very low-income
people. And most states have no system in place to ensure that
the accessible units are rented to persons with disabilities.
Low-income
persons with disabilities have not fully benefited from the
LIHTC program because housing agencies have not recognized the
importance of linking accessibility and affordability. And
disability advocates do not understand how the tax credit
program functions. Nor do they know how a QAP can be used to
target resources for the housing needs of low-income people with
disabilities. As a result, few of these advocates have
participated in the process of setting criteria for allocating
tax credits in their states.
Providing the
Incentives
The change in Pennsylvania's LIHTC program was the result of
several years of work. RHLS staff and disability advocates
recognized the critical importance of developing working
relationships with PHFA and the state welfare department. We
learned how the program was structured and operated, attended
PHFA's board meetings and met on numerous occasions with its
staff to discuss the desperate housing needs of the
lowest-income people with disabilities. We then tried to
convince PHFA to require developers to meet these needs, but the
agency resisted. It preferred to devise an approach based on
developer incentives, rather than program requirements.
After more
discussion and encouragement from RHS,
PHFA agreed to
offer developers point incentives in its QAP if they provided
accessible housing for disabled persons with incomes as low as
18 percent of AMI. While this change encouraged developers, by
itself it would not have been enough to make the initiative
successful. Beyond awarding additional points, PHFA has
permitted developers who target units to this population to
increase their developer fees enough to create an internal rent
subsidy (see
chart).
Developers can then set aside these funds permanently to make
rents affordable to disabled tenants with very low incomes.
To date,
Pennsylvania is the only state where internal rent subsidies are
used to provide LIHTC units for low-income persons with
disabilities. While some state housing finance agencies have
made rental subsidies available if developers accept low-income
persons with disabilities, most have been extremely slow to
recognize this population's needs and to use the federal tax
credit program to meet them.
North Carolina is
among the states that offer rental subsidies. Its program used
to be optional for developers of tax credit properties, who also
earned points in the QAP allowance process. But since 2004
developers have been required to set aside 10 percent of their
units for low-income and disabled people earning no more than 30
percent of AMI. The state sets aside funds for the subsidy,
which is awarded to developers as people who meet the income and
disability criteria are accepted as tenants.
Making the
connection between tenants with disabilities and the tax credit
housing is the other major component of the programs in both
states. In Pennsylvania's case, the PHFA serves as the
coordinating agency, maintaining a database of eligible LIHTC
units and informing the Department of Public Welfare when new
units open up. The owners and managers of housing developments
keep PHFA informed of whether units are available. For its part,
the welfare agency identifies people with disabilities in the
community who could live in tax credit housing, and provides the
services those tenants need to live on their own.
Pennsylvania's
Success
"The opportunity to live independently is crucial to improving
the quality of life for persons with disabilities, and
stabilizing communities," says Brian Hudson, PHFA's executive
director. "The changes we made to our QAP have been very
effective in influencing developers to propose tax credit
developments with units that are both affordable and accessible
to the very low-income families [that] need them."
In Pennsylvania
there have been four allocation cycles in the two years since
the affordable/accessible policy went into effect. Each of the
four allocations has resulted in a larger number of accessible
and affordable LIHTC units. As developers have come to
understand the significance of the incentives available to them,
more have chosen to participate. In the last tax credit
allocation round, all the developers awarded credits chose to
use these incentives to make a portion of their units accessible
and affordable to tenants earning as low as 18 percent of the
area median income. Developers agreed in the past two years to
create close to 400 new tax credit units for very low-income
persons with disabilities throughout the state, and the supply
is likely to increase annually.
