Article 1: Community Revitalization Standards and the Low Income Housing Tax Credit Program in the State of Texas

Abstract

 I examine whether housing developers in Texas are claiming points for community revitalization in the state’s annual Low Income Housing Tax Credit (LIHTC) allocation process and whether the plans they submit constitute a meaningful revitalization effort in distressed neighborhoods. From 2012 to 2015, Texas successively adopted more robust standards for community revitalization in its LIHTC Qualified Allocation Plan (QAP), and saw an accompanying decline in applications seeking points on this provision. A content analysis of revitalization plans submitted in 2015, however, finds a discrepancy between the standard of comprehensiveness upheld in the literature on community revitalization and the revitalization strategies contained in the plans. I find that plans rely heavily on improvements to physical infrastructure, while neglecting the soft pillars of revitalization such as education and community capacity building. Additional revisions to the revitalization provision in the QAP may be necessary to ensure meaningful revitalization efforts in high-poverty communities selected for LIHTC housing in Texas.

Introduction

The Low Income Housing Tax Credit (LIHTC) program has provided millions of units of rental housing to low-income persons since its inception in 1986. It has also, however, contributed to poverty concentration and racial segregation as a result of program regulations that incentivize development in high-poverty neighborhoods. In recent years, policy makers have attempted to stem the program’s tendency toward segregation by establishing standards for neighborhood revitalization in high-poverty areas selected for LIHTC housing. In this study I examine whether housing developers in Texas are claiming points for community revitalization during the state’s annual LIHTC allocation process, and whether the plans they submit constitute a meaningful revitalization effort in distressed neighborhoods. I begin with an introduction to the literature on LIHTC, poverty concentration, and community revitalization, then provide data on revitalization claims in the Texas LIHTC program from 2012 to 2015, and finally present findings from a content analysis of 2015 community revitalization plans.

The LIHTC Program and Poverty Concentration

According to the peer-reviewed and gray literature, LIHTC developments are primarily concentrated in high-poverty communities of color (Buron, Nolden, Heintzi, & Stewart, 2000; Ellen, Yorn, Kuai, Pazuniak, & Williams, 2015; Kawitzky, Freiberg, Houk, & Hankins, 2013). LIHTC siting standards, promulgated through federal program regulations and state Qualified Allocation Plans (QAPs), have contributed to this concentration over time. Early federal program regulations established in 1989 instruct states to give an advantage to developments located in high-poverty census tracts (referred to as Qualified Census Tracts, or QCTs), with the intent of providing affordable housing in areas with a high level of need (Williamson, Smith, & Strambi-Kramer, 2009). This original QCT allocation preference has been a strong driver of poverty concentration among LIHTC properties (Khadduri, 2013), along with project cost factors that increase the expense of developing in more affluent neighborhoods, such as prohibitive land costs and neighborhood opposition to subsidized (California Department of Housing and Community Development, 2014, p. 41; PolicyLink, Kirwan Institute, & National Housing Trust, 2014, p. 4; Williams, 2015). The same U.S. Department of Housing and Urban Development (HUD) regulations that provide an allocation preference to QCTs also grant an incentive for projects in “Difficult Development Areas,” defined as areas with high land or development costs relative to the median income (U.S. Department of Housing and Urban Development, 1997).

Academics and advocates have also criticized federal guidelines on state LIHTC siting standards for being ill defined and contradictory (Khadduri, 2013; Kawitzky et al., 2013; Roisman, 1997). In his legal analysis of the program, Myron Orfield (2005) concludes that LIHTC program regulations actively contradict fair housing standards, and posits that vague federal guidelines encourage states to actively subvert fair housing standards through their QAPs. Monique Johnson’s (2014) content analysis of state QAPs supports this narrative, demonstrating that QAPs rarely contain federal poverty deconcentration goals in their LIHTC siting standards. Evidence exists to show that changes to the state QAP have a statistically significant effect on LIHTC siting patterns (Ellen et al., 2015), but many state QAPs continue to contribute to poverty concentration by giving preferences to developments in high-poverty neighborhoods.

The Role of Community Revitalization

The community revitalization provision is one component of federal and state LIHTC program regulations with the potential to reduce poverty concentration among LIHTC properties. In 2002, the federal government added a provision to the 1989 LIHTC program rules instructing states to grant an incentive to projects in QCTs only if the project is accompanied by a “concerted community revitalization plan” (Tegeler, Korman, Reece, & Haberle, 2011). This revision represents an attempt to address the concentration of subsidized housing in areas experiencing chronic and comprehensive disinvestment.

Despite the well-intentioned attempt to stem the concentration of subsidized housing in areas lacking other forms of community investment, legal and policy scholars have critiqued the federal community revitalization provision as nonbinding in practice. The federal guidelines neither define the term “community revitalization” nor outline any uniform standards that states should consider when evaluating and granting incentives for revitalization plans. Orfield (2005) concludes that for the community revitalization provision to actually advance fair housing goals, states must take additional steps to give substance to the provision, given how poorly defined it is within federal regulation. Absent substantive federal revision, or additional proactive interpretation through state QAPs, he argues, the LIHTC program will remain in conflict with its mandate to affirmatively further fair housing.

In 2013, Khadduri conducted a content analysis of 36 state QAPs, finding that most do not incorporate the federal community revitalization provision into their siting standards. Moreover, the 2013 QAPs that do acknowledge the requirement fail to define the term “revitalization.” With no federal guidelines on what constitutes community revitalization, the lack of state guidance effectively makes the provision a nonbinding, nominal requirement. In 2015, Oppenheimer conducted an updated analysis of 49 state QAPs, finding that only 15 of those QAPs clearly define and state what must be included in a revitalization plan. This body of literature concludes that the community revitalization provision, both at the federal level and as operationalized in state QAPs, has historically lacked sufficient definition to act as a tool for housing desegregation in most states.

The Texas QAP and Community Revitalization

The Texas QAP defines the competitive process by which the Texas Department of Housing and Community Affairs (TDHCA) awards 9% housing tax credits to specific affordable housing projects. If a developer wishes to finance an affordable housing project with LIHTC, it submits an application to TDHCA during the annual LIHTC allocation process. The agency then scores its application according to criteria defined in the QAP. Limited funds are available to finance LIHTC housing, and therefore not all projects receive awards. In fact, many projects do not score high enough in the initial self-score application round to even warrant additional agency review. The state determines funding according to regional and categorical set-asides, selecting the highest scoring applications within each region or category to receive awards. Awards are therefore determined competitively in relation to one another, rather than by predetermined raw scoring threshold.

The Texas QAP has evolved iteratively since TDHCA began to address poverty concentration among LIHTC properties in 2012. Since 2013, Texas’s QAP has outperformed other states with regard to opportunity[1]siting standards and the strength of the community revitalization provision (Khadduri, 2013; Oppenheimer, 2015). The current strength of Texas’ QAP is largely attributable to the 2012 Inclusive Communities Project, Inc. v. Texas Department of Housing & Community Affairs federal summary judgment, which concluded that Texas’ QAP had produced systematic, disparate impact on minority communities, thus violating the Fair Housing Act. The Inclusive Communities Project initiated this fair housing lawsuit against the state in 2008, and the summary judgment compelled Texas to revise problematic provisions in the state QAP (Semuels, 2015). The federal circuit court ordered TDHCA to adopt a five-year remedial plan outlining how it plans to bring the state’s LIHTC allocation process and QAP into compliance with the Fair Housing Act.

Since adopting the remedial plan in 2012, TDHCA has revised the QAP to better conform to fair housing standards and to encourage LIHTC siting in high-opportunity neighborhoods. Prior to adopting the remedial plan, the community revitalization provision in the Texas QAP was weak and ill defined. In 2012, the community revitalization plan was worth only 1 point out of 226 in the applicant’s raw score, and the QAP did not define “revitalization.” Moreover, for documentation, TDHCA requested only a letter from the local governing body affirming that the LIHTC site was located within an area targeted for revitalization. THDCA neither required a copy of the plan nor evaluated the quality of the revitalization efforts or level of financial commitment from the city.

Following adoption of the remedial plan, however, Texas undertook a series of iterative revisions to its revitalization provision to make it more rigorous. Beginning in 2013, TDHCA raised the provision’s point value to a maximum of 6 raw points out of a total of 160. This point increase transformed the revitalization provision from a minor section of the QAP into a significant component of the scoring system. The LIHTC program is highly competitive, and six points is a considerable number when applications can be rendered noncompetitive simply for a loss of even one or two points. In 2013, TDHCA also began to require a budget (at specific funding levels) along with evidence that funding for the plan had commenced. Last, in 2013 TDHCA began to require that developers submit the actual revitalization plan for TDHCA to review and established loose standards for plan content. As of 2015, Texas revitalization plans were worth 6 out of 179 total points and expected to include an assessment of at least five of eight community factors:

• Adverse environmental conditions
• Presence of blighted structures
• Presence of inadequate transportation
• Lack of public facilities
• Presence of significant crime
• Presence, condition, and performance of public education
• Presence of local businesses providing employment opportunities
• Lack of efforts to address diversity

In 2015, TDHCA required that plans “as a whole” be reasonably expected to address the community factors identified in the assessment of need. While the 2015 QAP standards operationalize criteria for the needs assessment more clearly than actual activities and interventions undertaken in the plan, this revision represented TDHCA’s first step toward upholding the tenet of comprehensiveness in its revitalization plan standards. Table 1 and Table 2 present a full description of community revitalization standards in the Texas QAP for urban and rural projects, respectively, from 2012 to 2015.

Defining Meaningful Revitalization

One reason for the persistent lack of federal and state guidelines on community revitalization may be the complexity of defining standards for meaningful revitalization. Many factors contribute to successful neighborhood revitalization, and it is difficult to define a generalizable model across communities with different needs. One trend in the literature on revitalization, however, is clear: Investment in subsidized housing alone is insufficient to transform a neighborhood, and comprehensive efforts are necessary to produce sustainable neighborhood change. Orfield (2005), for example, showcases HUD research demonstrating that LIHTC development alone fails to produce revitalization. Therefore, community revitalization plan standards should contain elements beyond housing.

Tatian, Kingsley, Parilla, and Pendall (2012) provide an overview of the literature on neighborhood revitalization and identify several successful national models. They find that although research is needed to better define revitalization, some basic elements should be present in any revitalization effort. They identify comprehensiveness, community self-direction, and strategic community selection as key elements of successful revitalization. Drawing heavily from Galster’s (2010) work, they identify the following community revitalization strategies:

• Institutional and service mechanisms (e.g., child care and healthcare facilities, anchor institutions, grocery stores, schools and school quality, coordinated human and social service delivery)
• Social interactive mechanisms (e.g., collective efficacy, social capital and networks, neighborhood organizing)
• Environmental mechanisms (e.g., crime, safety, built environment, density, and walkability)
• Geographical mechanisms (e.g., metro and city-level trends, marginalization, access to jobs, disinvestment in neighborhoods due to segregation and sprawl)
• Residential mobility (e.g., household instability, churning movers, homelessness prevention)

Taking these facets of community development into account may help form a comprehensive best practices framework for community revitalization. Tatian and colleagues also identify several national programs that may serve as models for future efforts, though many are still undergoing empirical evaluation: Choice Neighborhoods, Promise Neighborhoods, the Neighborhood Revitalization Initiative, Neighborhoods in Bloom, and Building Sustainable Communities.

In her analysis of state QAPs, Khadduri (2013) also suggests foundational criteria for establishing more comprehensive revitalization plan standards, including “an assessment of the current condition of the neighborhood; a description of the plans for overcoming the neighborhood’s problems; [and] a description of the resources that are being or will be devoted to the revitalization effort (other than local government financial support for the LIHTC property itself)” (2013, p. 11). She identifies Indiana, Nebraska, Kentucky, Ohio, and Pennsylvania as states with robust revitalization provisions in their QAPs. Khadduri’s work suggests that level of detail, specificity of standards, and funding are important.

In this study I use the Building Sustainable Communities (BSC) initiative as a benchmark model in its content analysis of Texas revitalization plans. BSC is a project of the Local Initiatives Support Corporation (LISC) that has operated since 2007 and is supported by a variety of foundation funders (LISC, 2016). While the literature shows that there are a number of possible benchmarks and models against which to compare Texas’s revitalization standards, the BSC program is prolific (operating in 106 neighborhood sites as of 2012) and has demonstrated preliminary empirical success in its most recent program evaluations (Walker, Rankin, & Winston, 2010; Walker & Winston, 2014). The model also offers a number of clearly defined elements that are amenable to a content analysis framework. The model is comprehensive and emphasizes the following five program goals (LISC, 2015):

1. Expanditing investment in housing and other real estate
2. Increasing family income and wealth
3. Stimulating economic development
4. Improving access to quality education
5. Supporting healthy environments and lifestyles

Moreover, the BSC model emphasizes these five goals within the framework of building community capacity through investment in community partnerships and organizing. The importance of community capacity building is supported by the literature (for example, in Tatian et al. [2012] and Galster’s “social interactive mechanisms” strategy [2010]). Moreover, BSC’s emphasis on capacity is predated by long-term capacity building efforts such as the Annie E. Casey Foundation’s Rebuilding Communities Initiative (1994–2002; Annie E. Casey Foundation, 2002). The Casey Foundation’s initiative produced findings that “resident empowerment must be at the core of community rebuilding efforts,” and that “the need for capacity building is critical and continual” (Annie E. Casey Foundation, 2002, p. 7).

Claudia J. Coulton, who has worked with the Casey Foundation and conducted extensive research on social work and service provision in low[1]income communities, has found that to sustain employment opportunities in low-income communities (especially in an era of decreased federal welfare spending), “the primary intent must be community change…[and] much of this change has to occur by building the capacity of communities to support opportunity” (Coulton, 1996, p. 517). The body of scholarly and gray literature on revitalization acknowledges that it is a difficult concept to operationalize. However, there is consensus about the value of comprehensiveness and a growing body of evidence that community capacity building must be a core component of any successful revitalization effort. The comprehensiveness and capacity-building standards inform my analysis of community revitalization in Texas.

Methodology

In this study I analyze Texas LIHTC award and applicant data between 2012 and 2015 from TDHCA and provide findings from an original content analysis of 2015 Texas community revitalization plans. I present data on the number of applications requesting community revitalization points, the number receiving points, and the total number of LIHTC applications. I obtained complete application and award data for the 2012–2015 LIHTC application cycles, as well as individually imaged LIHTC applications, from the public TDHCA website. I obtained community revitalization application and scoring data by public information request to TDHCA in November of 2015.

In the content analysis portion of this study I compare the revitalization plans submitted to TDHCA during the state’s 2015 LIHTC application process with standards for revitalization outlined in the 2015 Texas QAP and the BSC model. I first evaluate the plans against the QAP to better understand whether plans are truly meeting the more robust plan content standards adopted by the state in recent years. I next evaluate against the BSC model because the initiative has demonstrated empirical success in moving the needle on poverty for a number of distressed neighborhoods nationwide, and because it is reflective of national best practices in comprehensiveness (taking into account some issue areas not addressed in the QAP).

To elucidate specific areas of revitalization that are supported or neglected by the plans, I also break down the QAP and BSC themes into subthemes based on language in the QAP and a coding system used by a recent BSC program evaluation, respectively. Table 3 presents a list of themes and subthemes addressed by each set of revitalization benchmarks.

Coding and Standards of Review

I established a coding framework and awarded plans a point within a specific theme or subtheme if at least one word, phrase, sentence, or paragraph in the plan met the coding criteria. I reviewed plans in their entirety where feasible. Where plan materials were very lengthy (more than several hundred pages), I used keyword searches and judicious review of key sections. Since LIHTC applicants often submitted a bundle of materials as evidence of meeting QAP revitalization standards, I considered all materials provided under the community revitalization section of the application, as well as citations to external planning documents, as a bundled package.

In private interviews with me and public comment to TDHCA, Texas housing advocates have expressed concern not only with revitalization plans’ substance and level of comprehensiveness, but also with plan implementation (Texas Appleseed and Texas Low Income Housing and Information Service, 2015). In particular, advocates worry that funding will not be deployed to address the issue areas identified in the revitalization plans, and that many plans merely pay lip service to the idea of revitalization rather than represent a material commitment to the community. The 2015 QAP acknowledges the importance of establishing funding objectives, requesting that plans provide a budget detailing the source of all planned expenditures as well as an attestation from local officials that funding for the plan has commenced. This emphasis on funding is consistent with recommendations from Khadduri (2013), who emphasizes that revitalization standards should include funding commitments.

I took these additional concerns into account when creating the content analysis framework for this study, applying a more rigorous standard for funding demonstration than TDHCA actually seeks from its applicants. As I discuss in the Introduction, 2015 Texas QAP standards operationalize the assessment of community need by requiring that an assessment address at least five of eight neighborhood factors. However, TDHCA asks only for an overall budget and that the plan “as a whole” be expected to effectively address the factors identified. This is in contrast to the BSC model, which concentrates on specific plan goals and includes a focus on the activities undertaken in the plan. For this content analysis I adopt an evaluation standard closer to the BSC framework, and look for specified levels of funding for each intervention in each of the identified community issue areas. I use the following criteria to award points to a plan.

• The unit of observation must be an intervention that specifically seeks to address one of the core themes or subthemes in either the QAP or BSC initiative. Identifying a challenge area, or area of need, without proposing an accompanying intervention is not sufficient to receive a point.
• A funding source and amount, whether dedicated or already expended, must be identified.
• The intervention must be local to the neighborhood, or a small handful of revitalization neighborhoods, and not reflect a citywide initiative.

Plans receive only one point per thematic category (i.e., multiple interventions in the same category do not equate to multiple points). Moreover, although this methodology does produce a point tally for each plan, study results focus on the presence or absence of points within each respective thematic category and not on plan totals. Table 4 displays the maximum points possible per plan and thematic category.

Where an intervention could reasonably be expected to address more than one theme or subtheme, it received a point in both categories. I did not design the coding categories to be mutually exclusive; some interventions may produce benefits for multiple revitalization categories. I exercised subjective discretion and applied a judicious standard when granting multiple points for interventions that applicants claimed in multiple categories.

Limitations

The content analysis is at least partially dependent on my subjective discretion when assigning points. I attempt to control for the inherent subjectivity of this process by adhering to a consistent coding framework for each plan and keeping meticulous notes containing plan citations and the justification for point decisions.

In addition, to assess the quality of the applicant pool for revitalization points, as well as to collect a sufficient number of data points for evaluation, I analyzed all 2015 applications requesting revitalization points, including those that did not receive the points requested or undergo full review by the agency. The analysis also includes rural and disaster recovery applications, even though these plans are not held to the same revitalization standards as urban applications. There were 4 rural and disaster recovery applications out of a total of 25 applications. Although these applicants are held to different standards in the application process, I include them in the analysis because the quality of the proposed plans when compared with accepted revitalization benchmarks is still relevant in assessing whether they constitute meaningful revitalization efforts.

I make claims about the community revitalization applicant pool to infer conclusions about the quality of QAP revitalization standards, yet the applicant pool is not necessarily reflective of the award pool. For applications that were not competitive enough to undergo full review, TDHCA did not have the opportunity to apply the QAP standards to those applications. It is possible that applicants with a “no review” status would not have received revitalization points from TDHCA, perhaps mitigating criticism of the current QAP standard. Moreover, it is difficult to assess trends in revitalization quality using a single year of analysis. Future research should attempt an analysis of years prior to 2012.

Findings on Revitalization Trends in Texas

In the last three years, since implementing the changes to the QAP required by the Inclusive Communities summary judgment, the number and characteristics of applications claiming revitalization points has changed. Revisions to the community revitalization provision in the Texas QAP appear to be producing a smaller pool of applicants, with the potential to affect both the number of LIHTC awards in high-poverty areas as well as the quality of revitalization efforts undertaken in these neighborhoods.

The pool of LIHTC applications requesting community revitalization points has changed dramatically since 2012, suggesting that modifications to the revitalization provision in the QAP have effectively altered this narrow segment of the LIHTC allocation landscape. Most notably, the percentage of applications requesting revitalization points has decreased significantly since 2012. Of the 173 LIHTC applications submitted to TDHCA during the 2015 cycle, only 25 (14%) asked for revitalization points. This represents a significant decline from 2012, prior to the state’s implementation of the remedial plan, when 62% of applications requested the single point available for revitalization efforts (see Figure 1).

While raising the maximum point value of revitalization from one to six points in the LIHTC scoring system might intuitively be expected to produce an influx of additional applicants, the concurrent introduction of more rigorous plan evaluation standards appears to have had the intended effect of reducing the total number of revitalization applicants. As outlined by the remedial plan, more rigorous standards are intended to produce the beneficial effect of reducing the number of applicants attempting to receive credit for nominal revitalization efforts. It is likely that reducing the number of revitalization applicants from 101 to 25 has successfully eliminated many applicants unable to offer proof of robust community revitalization efforts. The introduction of more rigorous standards also brings the number of applicants down to a number feasible for TDHCA to review with a heightened and more time-intensive level of rigor.

Recent changes to the revitalization provision in the QAP, and trends in the number of revitalization applications, point toward an increasingly substantive interpretation of the revitalization standard in Texas. I discuss whether these trends will be accompanied by a shift in the quality of revitalization plans themselves in the content analysis portion of this study. Data show that, while fewer applicants are requesting revitalization points, most still receive the full amount of points they request from TDHCA. In 2012, 56% of revitalization applications received the full amount of revitalization points requested from TDHCA, and only 2% were docked or denied points (the remaining 46% were not competitive enough to warrant review from TDHCA; see Figure 2). This is compared with data from 2015, where 64% of applications received the full revitalization points requested, and only 12% (or three applications) were denied points.

Part of the high approval rate for community revitalization points is likely due to self-selection of more serious applicants into the revitalization pool. Whereas in 2012 applications only had to meet a simple attestation standard from the local public governing body, revitalization applicants in 2015 had to meet a set of more rigorous quality standards and undergo review by senior TDHCA staff. I performed an additional content analysis on plans submitted to TDHCA for review and find patterns in how local communities are defining revitalization.

Findings on the Quality and Characteristics of Revitalization Plans

In a review of 2015 revitalization plans I find that developers submit a diverse range of documents to TDHCA as evidence of community revitalization. Formal neighborhood plans were the most common form of plan documentation in 2015. Nearly half (44%) of the plans submitted can be classified as neighborhood plans. However, they were not the only form of plan submitted. Documents that developers submitted ran the gamut from the city’s Annual Action Plan (a citywide housing document required to receive HUD funding), to the city’s comprehensive plan, to Tax Increment Reinvestment Zone resolutions, for example.

Moreover, a plurality of plans (44%) was enacted in 2015, suggesting that many municipalities pass revitalization plans for the express purpose of helping a specific LIHTC housing development obtain revitalization points. This is in contrast to an alternative order of action in which a city first identifies an area for revitalization, and only then lends its support to LIHTC housing as one way to achieve the plan objectives. Most plans were enacted prior to 2015, with the earliest enacted in 2005. However, several of the plans enacted in prior years were originally adopted for the purpose of obtaining LIHTC housing, and were simply resubmitted in 2015 after the development failed to receive an award in previous years.

The diversity in plan documentation is related to one problematic pattern in the 2015 application data: developers submitting citywide plans as documentation for neighborhood revitalization. In the 2015 applications, this sometimes takes the form of cities adopting a “neighborhood plan” which is in actuality a synthesis of excerpts from citywide planning documents (such as the comprehensive plan, or Capital Improvement Plan, etc.). Eight (32%) of the 25 revitalization plans relied heavily or exclusively on content from citywide documents as evidence of neighborhood revitalization. Whereas this might be justifiable in a rural city where the small population renders neighborhood distinctions inapplicable, none of the eight plans with a heavy reliance on citywide documentation were for projects in rural cities (by TDHCA standards). The QAP, while requiring less comprehensive revitalization efforts from rural projects, explicitly requires infrastructure investments for rural projects to be located within a certain distance of the proposed site. Therefore, citywide documentation appears to be a more significant issue among non-rural jurisdictions.

An additional area of deficiency for many plans was the lack of a clear budget. While most plans did not outline specific funding for each proposed intervention, many did a reasonable job of offering evidence of funding for at least some of the proposed initiatives in the plan. However, some plans lacked budgets or evidence of funding entirely, and it is unclear how these plans passed the budgetary requirement outlined in the 2015 QAP. Nine (36%) out of 25 plans lacked a clear budget for a significant number of proposed interventions.

A content analysis of plans, moreover, reveals a discrepancy between the ideal of comprehensiveness upheld in the literature and the approach to revitalization taken by many Texas municipalities and LIHTC developers. Plans in Texas are heavily reliant on physical redevelopment and improvements to the built environment, and tend to be less concerned with “soft” revitalization components such as services, education, or public health, for example. In the following sections I explore how Texas plans compare to the QAP and BSC revitalization benchmarks, respectively.

Texas Plans and the 2015 QAP Standard

A content analysis of the revitalization plans submitted to TDHCA in 2015 reveals that transportation and other infrastructure improvements comprise the largest percentage of funded interventions (see Table 5). This category includes improvements such as sewer and water lines, road maintenance or other arterial improvements, transit stations, etc. Next, in order of frequency, are interventions addressing lack of access to public facilities (which includes law enforcement, health care, or recreational facilities and parks) and adverse environmental conditions (including flooding, industrial land uses, dangerous traffic thoroughfares, etc.). It is important to note that only three applications contain funded interventions designed to address crime and safety (despite a large number of applications identifying crime as a problem for the targeted area); only four applications contain initiatives to promote diversity (defined by TDHCA as either multigenerational or economic); and only nine include interventions dedicated to school facilities or quality.

In this study my intention is to better understand the detailed content of revitalization plans and whether they are contributing to meaningful revitalization efforts. Therefore, in this analysis I use a narrower and more rigorous standard than that required of TDHCA in the QAP (namely in regard to funding and specificity of interventions). It is revealing that, under the standards of this content analysis, most 2015 plans submitted to TDHCA do not meet the requirement to address at least five of the eight community factors in a material way. Thirteen (52%) of the 25 plans propose funded interventions for less than five of the eight community factors. Several plans propose zero funded interventions (a score that is largely a byproduct of failing to disclose sufficient funding details to receive a point in the scoring framework), and several plans propose only infrastructure interventions.

Of the 13 plans addressing fewer than five community factors, nine received full community revitalization points from TDHCA. This is not meant to suggest that TDHCA is evaluating plans improperly, but rather that the current QAP standards do not effectively operationalize revitalization interventions. TDHCA, by nature of its role as an administrative agency, is not empowered to impose discretionary standards onto developers when assessing revitalization efforts. As I discuss earlier in this study, in recent years the Texas QAP has moved toward a more substantive and subjective review process for the revitalization provision. The post-2012, revised QAPs equip TDHCA with a more robust toolbox to reject plans that fail clear tests of rigor. However, the discrepancy between the number of applications approved and the number that fail to materially address the minimum number of community factors illustrates the gap between the current operational definition of revitalization and the efforts necessary to achieve real results in distressed communities.

For the purposes of consistency in coding plan interventions, and to add an additional layer to the analysis, I break down the eight community factors into more specific subfactors (using language taken directly from the QAP). When parsing the plans according to these sub-factors, the presence of inadequate transportation or other infrastructure remains the most common factor addressed by the plans (see Figure 3). This is, in part, because this straightforward factor does not contain any subcomponents outlined specifically in the QAP. However, the subfactor analysis also reveals that, for factors such as “adverse environmental conditions,” there are entire challenges within categories that go routinely unaddressed. For example, toxic emissions, hazardous waste sites, and industrial land uses are included within the category of “adverse environmental conditions,” but are addressed by few plans. The item that appears to push adverse environmental conditions high in the ordinal ranking in Table 2 is flooding, for which 10 plans include funded interventions (e.g., drainage improvements; Figure 3).

Part of the heavy reliance on physical infrastructure is likely due to TDHCA’s standard that the plan “in whole” be expected to address challenging community factors identified in the QAP. Many of the plans cite infrastructure improvements as a panacea for several different neighborhood challenges and community factors. For example, one city submitted a successful application for revitalization points claiming that investments in a sewer line would contribute to the quality of public education in the target area. In this analysis, cross-cutting interventions were identified judiciously, and points were not awarded for unreasonably broad statements (e.g., heavy infrastructure contributing to the quality of public education).

Texas Plans and the BSC Standard

Evaluating 2015 plans on the BSC standard yields similar results to that of the QAP standard analysis. Most plans propose interventions under the “healthy and safe communities” goal, with housing and economic activity following. Again, fewer plans address education, and only three address the income and asset-building goal (see Table 6).

Also notable is the lack of attention to community capacity-building. Building community capacity is a cornerstone of the BSC model, which maintains that sustainable revitalization and neighborhood transformation are driven by local buy-in and engagement. BSC promotes capacity building by investing in partnerships, community organizing, and in identifying a local community agency to lead revitalization efforts. Texas’s 2015 QAP, by comparison, only requires that the revitalization plan be adopted with opportunity for community input. It does not make any demands with regard to investing in ongoing, local community capacity building. In fact, many cities’ formal participatory processes would not qualify as capacity building under BSC standards, since they primarily involve holding a formal public meeting or hearing without necessarily soliciting representative community input.

Most plans submitted in 2015 do not acknowledge the role or presence of local community groups. This reality may pose a problem for the ongoing success of these plans. Participation and capacity building are increasingly accepted as important components of successful long-term revitalization, and these elements are conspicuously absent from most Texas plans. A small minority of plans does mention capacity building or community partnership initiatives, but fail to identify specific funding for these proposals. As per the analytic framework of my evaluation, these unfunded proposals are not granted points in this analysis. This is important to acknowledge, since it appears that capacity-building initiatives, along with other “soft” revitalization efforts, are systemically deprived of line item funding status. However, the literature on revitalization increasingly emphasizes the importance of revitalization efforts being comprehensive and addressing those soft factors. These “soft” initiatives are as worthy of hard, line item funding status as sewer plants or highway improvements

I also break down the five BSC goals into subgoals based on a coding system used in a recent BSC program evaluation. Because the BSC goals are fewer and encompass more subcategories than the QAP factors, disaggregating them is illuminating. Table 7 contains a color-coded list of the BSC goals and subgoals for cross-referencing with Figure 4.

Nineteen (76%) of the 25 plans contain funded interventions to improve the built environment, including basic infrastructure (sewer and water lines, road improvements, etc.) as well as sidewalk improvements, hike and bike trails, transit infrastructure, and other non-housing, non-commercial investments into physical redevelopment (see Figure 4). The next four most common areas of investment are community facilities (actual physical facilities such as a recreation centers), other investments to support business development, and housing construction and renovation (separate from the proposed LIHTC housing development).

Areas that receive comparatively little investment, again, include the “soft” components of revitalization such as youth development opportunities, child care, crime and safety, food access, and financial counseling. As I discuss earlier in this study, one of the key components of the BSC initiative is to identify a neighborhood organization (such as a Community Development Corporation) to lead the revitalization efforts. No plans in the 2015 applicant pool identify a local organization as a revitalization coordinator or lead. Some plans identify a local organization for key areas of intervention, or specific projects, which is approximating the BSC standard but not replicating it. Most plans do not meet standards for comprehensiveness or capacity building as outlined in the BSC model.

Conclusion

Following a thorough review of the history and current status of the “community revitalization” provision in the Texas QAP, I find that standards have improved significantly since the Inclusive Communities summary judgment in 2012. Texas is increasingly incorporating comprehensiveness into its QAP revitalization plan standards, and is moreover requiring evidence of meaningful investment in the low-income communities selected for LIHTC housing. The number of applications requesting points on revitalization in low-income communities has decreased substantially since standards were made more robust in 2013.

Despite these encouraging findings, a content analysis of the 2015 revitalization plans illustrates a strong departure from the standard of comprehensiveness embodied both in the nationally recognized BSC model and in the Texas QAP itself. In fact, most plans, when evaluated under a tighter standard emphasizing funding and specificity of proposed interventions, would not meet the standards established in the Texas QAP itself. Moreover, most of these plans received full revitalization points from TDHCA during the LIHTC application review process. Texas revitalization plans are heavily reliant on infrastructure, and do not contain significant investment in soft revitalization pillars such as education, safety, or community services. They also fail to invest in community capacity building, which is increasingly recognized as a vital component of successful revitalization efforts

These findings indicate that additional standards or review processes may be necessary to close the gap between best practices for revitalization nationally and what is currently interpreted as revitalization by Texas cities and developers. Moreover, findings are consistent with prior research on Texas housing policy, such as Peter Ward’s work on Texas’ informal housing settlements, known as colonias. Following fieldwork and comparative policy research on Texas colonias, housing scholar Peter Ward (1999) criticizes Texas’ tendency to address colonias narrowly as an issue of physical infrastructure, rather than of structural economic underdevelopment. He expresses skepticism regarding the state’s “Band[1]Aid solution” focusing on physical infrastructure improvements when colonias in fact represent “a structural problem compounded by” a number of factors, including “weak administrative capacity, inadequate laws, and enfeebled social organization and local leadership” (Ward, 1999, p. 260). In this study I provide additional evidence that Texas habitually approaches community development with too narrow a lens, paying insufficient attention to wider structural challenges that affect the housing and community development landscape at the local level.

These findings will hopefully provide a foundation for further analysis and exploration of policy alternatives to address deficiencies in current revitalization standards. Future research may decide to focus on specific QAP revisions that will help hold cities and developers accountable to more meaningful revitalization standards in Texas, as well as the quality of plan implementation at the local level (including the identification of practical metrics to demonstrate plan success over time). Moreover, because Texas has become a focal point for national discourse on fair housing since the Supreme Court heard the Inclusive Communities case in 2015, the efficacy of Texas’s revisions to its QAP should be of interest to other states making efforts to desegregate their LIHTC housing.

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