Agency Gets Okay to Continue Allocating Tax Credits for Proposed Developments

The Texas Department of Housing and Community Affairs (TDHCA) was given the okay by a U.S. district court judge to go ahead with the way it had been promoting investment in low-income housing developments.

The suit, which was brought by nonprofit group Inclusive Communities Project, Inc., alleged that the agency was disproportionately allocating tax credits for proposed developments in a way that perpetuated housing segregation. Inclusive Communities, which helps minority clients locate and find affordable housing, contended that the agency’s allocation of tax credits violated the Fair Housing Act. The TDHCA argued that the nonprofit group lacked understanding of the way in which tax credits were allocated.

TDHCA administers varying amounts of LIHTC funds each year ($43 million in 2007) and has the authority to approve or deny tax credit applications for proposed housing developments. In evaluating applications, TDHCA follows an annual Qualified Allocation Plan (QAP), which sets requirements relating to threshold eligibility and selection criteria [Inclusive Communities Project, Inc. v. Texas Department of Housing and Community Affairs, 12/11/2008].