10 Terms to Know for Affordable Development
Jesse King | April, 2024
Navigating the world of affordable development in real estate involves understanding a variety of terms and programs that play critical roles in shaping housing policies and initiatives. Whether you’re a developer, investor, broker, or community advocate, familiarity with these key terms is essential for leveraging resources and opportunities in the affordable housing sector. In this blog post, we’ll explore ten important terms related to affordable housing development, shedding a light on their significance and how they impact housing strategies across Florida.
1. HUD (Department of Housing and Urban Development):
HUD administers federal housing and urban development laws, playing a central role in shaping affordable housing policies and initiatives nationwide.
2. FHFC (Florida Housing Finance Corporation):
LIHTC is a national program that provides tax credits to state and local agencies for housing targeted at lower-income families, supporting the acquisition, rehabilitation, and construction of affordable housing.
3. LIHTC (Low-Income Housing Tax Credit):
LIHTC is a national program that provides tax credits to state and local agencies for housing targeted at lower-income families, supporting the acquisition, rehabilitation, and construction of affordable housing.
4. SB 102 (Live Local – Senate Bill 102):
Senate Bill 102, also known as Live Local , became effective in July 2023. It encourages affordable housing by allowing multifamily or mixed-use residential development in commercial or industrial zones, provided at least 40% of units are affordable for 30 years.
5. AMI/AMGI (Area Median Income/Area Median Gross Income):
AMI/AMGI represents the midpoint of income distribution in a specific area and is vital for assessing eligibility for affordable housing programs.
6. QCT (Qualified Census Tract):
QCT is an area where at least half of households have incomes ≤ 60% of AMI or where ≥ 25% of the population lives in poverty, qualifying for certain housing incentives.
7. DDA (Difficult Development Area):
DDAs are regions with high land, construction, and utility costs relative to AMI. Projects in QCTs or DDAs receive a 30% boost in basis for new construction and rehab costs.
8. SAIL (State Apartment Incentive Loan Program):
SAIL offers gap financing for developers, requiring a minimum of 20% of units for families earning ≤ 50% AMI or 40% of units for those earning ≤ 60% AMI.
9. LGOA/GOA (Local Government Area of Opportunity):
LGOA/GOA refers to funds available in specific jurisdictions for affordable housing creation or rehabilitation, subject to specific requirements.
10. RECAP (Racially and Ethnically Concentrated Areas of Poverty):
RECAP identifies census tracts where ≥ 40% of residents live below the poverty line and ≥ 50% are people of color. Development in these areas face FHFC disincentives to prevent service disparities and food deserts.
Understanding these terms empowers stakeholders to navigate the complexities of affordable development more effectively. If you’re considering affordable housing projects or have land suitable for such incentives, our experienced land team, Austin McWilliams and Jesse King , is ready to assist. Contact us today to explore how we can collaborate on your affordable development goals and contribute to creating vibrant, inclusive communities across Florida.