2011 Qualified Census Tracts and Difficult Development Areas

Originally established in 1989 to encourage production of affordable housing units in hard-to-serve areas, PD&R recently released the 2011 statutorily mandated Difficult Development Areas (DDAs) and Qualified Census Tracts (QCTs). The Internal Revenue Code defines a DDA as "any area designated by the Secretary of Housing and Urban Development as an area which has high construction, land, and utility costs relative to the area median gross income." QCTs are census tracts in which one-half or more of the households have incomes below 60 percent of the area median income or the poverty rate is 25 percent of higher. A 20-percent population cap in each metropolitan area or nonmetropolitan part of a state limits the designation of eligible census tracts as QCTs.

Based on the QCT and DDA designations, developers using the Low-Income Housing Tax Credit (LIHTC) program to build or rehabilitate affordable rental housing can claim 30 percent more in tax credits than is available to identical projects outside of these areas. While the 2011 QCTs were unchanged, DDAs experienced some revisions, primarily due to the expiration of Gulf Opportunity Zone designations. The Gulf Opportunity Zone Act of 2005 (GO Zone Act) defined areas affected by Hurricanes Katrina, Rita, and Wilma as GO Zones and automatically qualified these areas as DDA. This status, however, expires on December 31, 2010, meaning that no GO Zone Act DDAs are designated for 2011.