What is the most important feature of affordable housing? Simple! It’s right there in the name, right? Affordable. But no. When the Illinois Housing Development Authority (IHDA) evaluates housing projects for tax credits it gives out points for desirable projects. Quoting Richard Day:
For the general scoring track, 10% of points are awarded for extra accessibility features, 13% are awarded for additional energy efficiency criteria, 15% are awarded based on the makeup of the development team, and an extra 4% are headed out to non-profit developers. Only 3% of scorecard points are awarded based on project cost.
Thus, when you look at what the affordable housing authority actually does it awards more than four times as many points to energy efficiency than affordability. “Development team” includes some mandatory requirements for experience, which makes sense, but also:
(a) incentivizing Black, Indigenous, or People of Color (“BIPOC”) and minority participation on the development team,
Indeed, a for-profit “certified” BIPOC-led business can earn up to 11 points (and a BIPOC-led non-profit up to 7 points) and you can get a few more points if you go the intersectionality route and have a certified female headed BIPOC team. Cost Containment in Project Design & Construction tops out at only 3 points (plus there are 8 more potential points for targeting to extremely poor residents which presumably also gets you some cost control).
Thus, rather than affordable housing what is actually being incentivized is some combination of:
- Racial equity goals
- Environmental sustainability
- Community development
- Supporting vulnerable populations
- Universal design for accessibility (7 points for going beyond code)
This is what Ezra Klein calls Everything Bagel Liberalism and what I called in one of my favorite posts the Happy Meal Fallacy.
The icing on the cake, by the way, is that Day argues that the IHDA is a better system than the even more convoluted and expensive system for affordable housing promoted by Chicago’s Department of Housing.
Hat tip: Ben Krauss writing at Slow Boring.
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