State Announces New Plan to Open Up Affordable Housing Pipeline in Arizona

On November 30, 2021, Governor Doug Ducey signed The Arizona Department of Housing’s (ADOH) new Qualified Allocation Plan (QAP) for 2022 and 2023. The QAP document details all award policies, procedures, and requirements for stakeholders and developer partners to apply for future rounds of both 9% and 4% low-income housing tax credits (LIHTC), as well as the newly-created State LIHTC, through ADOH in 2022 and  2023.

On November 1, 2021, the Arizona Department of Housing (ADOH) ADOH created a draft QAP and held ten focus groups in July/August 2021 to seek preliminary input, then held six public hearings between August-November 2021, to solicit feedback from affordable housing stakeholders regarding updates to the document. 

ADOH received more than 600 comments from 50 stakeholders in drafting the final QAP. Here are some highlights of the new QAP based on that feedback:

  1. The document length was streamlined from more than 300 pages to less than 50.
  2. New construction project scoring was updated to better evaluate applications.
  3. Underwriting procedures and award limits were reevaluated and updated.
  4. The 4% LIHTC application process was streamlined to facilitate faster awards.
  5. Detailed requirements for the new state LIHTC program were included.

At the end of FY 2021, Governor Doug Ducey signed into law a new state of Arizona low-income housing tax credit (LIHTC) program to encourage more affordable housing development. The program provides developers who have been awarded either 9% or 4% federal low-income housing tax credits with up to $1 million in state credits per project. Total available state LIHTC for all developers combined is $4 million per year and the program lasts for four years. Development utilizing the State LIHTC is encouraged in both urban and rural communities throughout the State. The yearly $4 million is split equally with $2 million for urban areas and $2 million for rural areas. ADOH analysis suggests that the new state LIHTC program could spur as much as $160 million in new affordable housing development in Arizona.

“Rewriting the QAP so quickly, and so swiftly implementing the state low-income housing tax credit program after Governor Ducey signed it into law, both within a few months, is a remarkable achievement, and evidence that we will do whatever is necessary to bring about housing affordability in Arizona.”

Tom Simplot, ADOH Director

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