HUD Publishes 2007 Difficult Development Area and Qualified Census Tracts Lists

From: HUD USER News
 
On Thursday, September 28, 2006, HUD published the 2007
lists of Difficult Development Areas (DDAs) and
Qualified Census Tracts (QCTs) for Section 42 of the
Internal Revenue Code, the Low-Income Housing Tax Credit
(LIHTC), in the Federal Register.
 
DDAs are metropolitan areas and nonmetropolitan counties
with high land, construction, and utility costs relative
to area median gross income. QCTs are census tracts
where either 50 percent or more of the households have
incomes below 60 percent of the area median gross
income, or the poverty rate is 25 percent or higher,
subject to the constraint that the population of
designated tracts in a metropolitan area, or the
nonmetropolitan part of a state, cannot exceed 20
percent of total population of the area.
 
The following summarizes the changes in DDAs and QCTs
between 2006 and 2007.
 
DDA Changes
The 2007 DDAs are the first to follow the metropolitan
area definitions revised according to 2000 census
findings. HUD based the 2007 designations on the FY2006
Fair Market Rents (FMRs) and Very Low-Income Limits
(VLILs), which follow a modified version of the new
metropolitan area definitions. Since HUD's modifications
of metropolitan area definitions mitigate large changes
in FMRs and income limits, the changes to the list of
metropolitan DDAs between 2006 and 2007 are limited. Due
to the change in metropolitan area definitions, the
counts are not strictly comparable.
 
Overall, 62 Metropolitan Statistical Areas or HUD Metro
FMR Areas are designated as 2007 DDAs. Five 2006
metropolitan areas will no longer be DDAs in 2007; seven
metropolitan areas that are not on the 2006 list become
2007 DDAs.
 
A total of 406 nonmetropolitan counties will be
designated 2007 DDAs. There are 58 counties or New
England county parts that are nonmetropolitan 2006 DDAs,
but are absent from the 2007 list. Of these, 49 became
parts of metropolitan areas that are not 2007 DDAs.
Seventy-six nonmetropolitan areas that are not 2006 DDAs
are now 2007 DDAs. Three of these were formerly in
metropolitan areas that were not 2006 DDAs.
 
QCT Changes
Overall, 10,169 QCTs are designated for 2007. This
designation uses a more highly detailed tract-level
household income distribution tabulation than that used
to produce the 2006 list. Of the 2006 QCTs, 228 are not
on the 2007 list. QCTs added in 2007 include 477 census
tracts, creating a net addition of 249.
 
These data and information about the QCT designations
are available to the public from HUD USER
at qct.huduser.gov/index.html and www.huduser.gov/datasets/qct.html.
For explanation of how the FY2006 FMRs and FMR areas were
determined, and how FY2006 VLILs were computed,
see https://www.huduser.gov/portal/datasets/fmr.html#2006_query
and www.huduser.gov/datasets/il.html.
 
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