| Adjusting Geographic Apportionments|
|Geographic regional apportionments are used across the country by Tax Credit Allocation Committees. They determine how best to divvy up available tax credits, which are used to fund the development of low- and moderate-income housing. In California, for example, the California Tax Credit Allocation Committee (CTCAC) divides the state into ten geographic areas, each of which receives a pre-determined percentage of available tax credits. Current apportionments are based on methodology that was developed in 2004, and the CTCAC recently decided it was time for an update.|
For the last several years, tax allocations in California have been distributed among the following regions: Los Angeles County, Central, North and East Bay, San Diego County, Inland Empire, Orange County, South and West Bay, Capital and Northern, Central Coast, and San Francisco County.
In general, regional apportionments are based on population, and adjusted for housing cost, urbanization and rate of poverty. The primary change to current methodology comes from updated population data via the 2010 U.S. Census and related information. Since some of 2010 Census data won't be available until 2013, the American Community Surveys data - also from the Census Bureau - will be used in the interim.
Not only have populations shifted, but housing costs have changed dramatically over the last few years, with home values dropping sharply. Interestingly, the opposite is true of rental costs in many communities. As foreclosure rates have increased, and people have become more wary about buying houses, the demand for rental properties has gone up. Higher demand equals fewer available units and higher rent prices. This has hit low- and moderate-income residents especially hard, and fueled new calls for aggressive development of affordable housing.
In addition to updated population data, the CTCAC is also considering the addition of an 11th region, which would separate the city of Los Angeles from the County. There is such a high population concentration in the city, and the cost of living is so different between the city and the county as a whole, that lumping them together no longer makes sense.
Because geographic apportionments play such a key role in determining tax credit allocations, the accurate representation of geographic regions is important. For example, Los Angeles County currently gets a full 33 percent of tax credit allocations, leaving less than 70 percent for the remaining nine regions. Consequently, none of the other regions receive more than 10 percent of available allocations, including San Diego County where the affordable housing need is significant.
As state and local governments continue assessing their affordable housing programs, other adjustments and updates are likely. Affordable housing advocates are hopeful that program updates will reallocate tax credits and funding to areas where it's needed most.