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Wednesday, March 10, 2010
Why a QCT/DDA?
What is a QCT / DDA?
A QCT is a census tract where the average median income is less than 60% of the
county median income, or where the poverty rate is greater than 25%. A DDA is an
area that has high construction, land and utility costs, relative to the Area Median
Gross Income (AMGI).
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Enterprise Zone, Tax Abatement and City Support-Danville Needs a Senior Deal
Vacant Land, QCT
Danville, Illinois
2.20 Acres
R-3 Renaissance District, requires a rezone to B-4 or PUD. Density is unlimited.
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Excellent 9% Senior Development Location with excellent visibility
Vacant Land, DDA
Roseburg, Oregon
2.35 Acres
MR-29, 29 units per acre
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Multifamily Development Opportunity in Moderate County
Vacant Land, QCT
Goldsboro, North Carolina
24.50 Acres
R-9, which allows for 8.68 units per acre
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134 Total Available Listings
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Historic Buildings - 24
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DDA - 18
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Vacant Land - 103
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Non-QCT/DDA - 9
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Apartments - 7
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QCT - 107
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Why a QCT / DDA?
Eligible Basis multiplied by 130% of what it otherwise would be.
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Example Eligible Basis Calculation
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Non-QCT Calculation
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QCT Calculation
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Total Development Cost of Property (Total Uses)
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$8,000,000
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Total Development Cost of Property (Total Uses)
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$8,000,000
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Less: non-eligible basis (i.e. land, syndication fees, closing costs)
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($1,000,000)
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Less: non-eligible basis (i.e. land, syndication fees, closing costs)
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($1,000,000)
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Eligible Basis (Total Uses minus land)
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$7,000,000
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Eligible Basis (Total Uses minus land)
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$7,000,000
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Non QCT (100%)
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$7,000,000
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QCT Boost (130%)
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$9,100,000
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Credit Percentage (4% or 9%)
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9%
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Credit Percentage (4% or 9%)
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9%
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Total annual tax credits (Eligible Basis x Credit Percentage)
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$630,000
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Total annual tax credits (Eligible Basis x Credit Percentage)
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$819,000
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Ten Year Total Credits
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$6,300,000
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Ten Year Total Credits
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$8,190,000
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Additional QCT Credits (via a QCT)
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$1,890,000
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QCT / DDA Trend
The 30-percent boost in LIHTCs associated with QCTs has helped finance more than
one-fourth of all LIHTC projects and approximately one-third of projects in recent
years.
In 2004, the latest year for which data is available, 47.5 percent of LIHTC projects
and 56.1 percent of LIHTC units were located in a QCT
The chart below suggests an increase of 3.3% (in units) per year, at this rate all
units will be located within a QCT/DDA by 2016!
*Source: U.S. Department of Housing and Urban Development
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