Considering New Strategies for Food Security in LIHTC Communities 

As the new administration plans to slash federal funding for vital food assistance programs, renters—and the affordable communities that house them—face dire consequences. Although residents will bear the immediate brunt of these cuts, some financiers and owners are introducing new food security initiatives for residents and surrounding communities, hoping to stabilize renters as they shore up the long-term viability of affordable housing developments.

Existing Trends, Growing Urgency
Since the onset of the COVID-19 panic in 2020, the proportion of tenants experiencing prolonged economic strife has increased. This is especially evident in tenant data for Low Income Housing Tax Credit (LIHTC) properties.

According to data from the Department of Housing and Urban Development (HUD), in 2022, 51.1 percent of households in LIHTC properties had incomes at or below 50 percent of area median incomes (AMI), an increase from 44.4 percent in 2017. During the same five-year span, the percentage of households in LIHTC properties receiving monthly rental assistance rose to 47.7 percent in 2022, up from 39.9 percent in 2017. The risk of reduced services—especially food assistance programs like the Supplemental Nutrition Assistance Program—means that tenants will increasingly face difficult choices between feeding themselves and paying rent, utilities, and other living expenses.

The LIHTC program operates on the basic assumption of long-term financial stability for renters, leading to lower risk for lenders. Conversely, an increase in the level of food insecurity within LIHTC households could have cascading financial effects for stakeholders across the affordable housing sector.

Incentivizing Nutrition Programs via QAPs
At the state level, development authorities exercise discretion over the allocation of tax credits, outlining their criteria in Qualified Allocation Plans (QAP). Applicants may be weighted on a variety of economic, social, and mission-based factors that vary widely from state to state. But while food security bears heavily on affordable housing stability nationwide, many QAPs do not reflect the urgency of the situation on the ground.

A Tax Credit Advisor analysis of current QAPs found that only 30 states, plus the District of Columbia, Puerto Rico, and the Northern Mariana Islands, specifically incentivize LIHTC developments close to grocery stores. Though it is vital that residents access groceries easily, proximity to grocery stores is far from sufficient as a solution to food insecurity.

Even fewer state development authorities pursue solutions to food security beyond simple proximity. Only ten states and DC specify food or nutrition access as a specific criterion. Among those are some notable examples of how QAPs can be utilized by state development authorities to target hunger in their communities – and how they may fall short.

Some QAPs specifically integrate resident SNAP enrollment into their calculations of tax credit eligibility. The New Mexico Mortgage Finance Authority gives extra weight to applications which include onsite programs to help eligible residents apply for and maintain SNAP benefits. In New Mexico, that criterion is in the same category as onsite health and fitness classes, nutrition education programs, and youth lunch/after-school food programs.

Other states actively discourage LIHTC development in existing food deserts. The Georgia Department of Community Affairs uses USDA guidelines to delineate food deserts in their QAP. Sites within USDA-defined food deserts have points deducted on their applications, discouraging further density in areas that are already nutritionally underserved.

Many QAPs calculate distance thresholds using a straight-line method, resulting in some properties being built beyond a reasonable distance from food resources due to a lack of pedestrian infrastructure. Others do not mention food access at all: 19 states, plus Guam and the U.S. Virgin Islands, do not directly consider food access as a qualifying factor for tax credit allocation. This oversight in some state QAPs may disincentivize the incorporation of food security programs into new LIHTC developments.

Building Trust in Uncertain Times
In the past, LIHTC properties have provided a source of relief for tenants who have not been well served by market-rate housing – easing not only financial and logistical burdens but emotional burdens as well. A 2018 report on LIHTC living conditions in California documented that, for many residents, there was a benefit to living in buildings with more mission-oriented landlords, noting that “LIHTC properties are often managed by mission-driven nonprofit and for-profit developers, who have both the capacity and the resources to provide resident services.”

Raisa Johnson is the managing director of community outreach and impact for the National Housing Trust (NHT), which owns 4,000 affordable units across 12 states and the District of Columbia. Johnson has observed firsthand that, in recent years, tenants have become increasingly challenged by worsening economic conditions, expressing a need for alternative solutions where SNAP could fall short.

“One thing that we have seen—starting with COVID, but increasing since then with the economy and inflation—is residents not being able to meet their basic needs,” Johnson says. “Providing free food, especially fresh food, has a huge benefit to households.”

NHT has owned Washington View Apartments in Southeast Washington, DC, since 2023. After purchasing the property from WC Smith with financing from Amazon and JPMorgan, they intend to apply for LIHTC and subordinate funding once DC funds become available as a means of backstopping naturally occurring affordable housing in DC’s Ward 8.

Johnson says that Washington View is unique among affordable housing properties in the DC area because its units range from one to six bedrooms, allowing for a proliferation of multi-generational households within the complex. In the surrounding zip code 20032, 33 percent of residents receive SNAP benefits; continually rising grocery costs and potential cuts to SNAP are detrimental to residents and the wider community.

“We were talking through the project and how we wanted to approach this issue,” Johnson recalls. “We knew that low-cost food was one of the main asks from residents. How could we use food as the center of this project? How could we address other health outcomes using food as the basis?”

Partnering first with the Collaboration for Equitable Health powered by Bank of America, and more recently the Interrupt, NHT began offering food pantry and health clinic services to Washington View residents. The program started in 2023, and Johnson says that the impact has been remarkable. She hopes to expand the hours that residents can access pantry resources in the near future.

“We know that families work, and we want to make this accessible after hours. So, we’re expanding our partnership,” she says. In addition to Bank of America and Novo Nordisk, the cross-sector collaboration also includes local outreach organizations, including Black Nurses Rock, DC Central Kitchen, Capital Area Food Bank, and Building Bridges Across the River. The effort could serve as a model for other owners, but Johnson adds that she looks to other grassroots organization in the area as she implements the program, drawing upon them for inspiration. “There are a lot of successful examples of mutual aid in DC,” she says.

Looking ahead, Johnson says that the initiatives will respond to threatened cuts to federal food security programs, such as SNAP and WIC, hoping to provide some relief to tenants. “These subsidy programs are absolutely essential for survival,” she says. “I think it’s clear that people are going to need this support moving forward.” According to Johnson, the programs strengthen community and engender a more trusting landlord-tenant relationship.

But in the longer term, NHT hopes that residents will understand that the food pantry and planned community garden are their own spaces. “We are constantly thinking about resident engagement,” Johnson says. “One way is to bring in a resident manager to help us talk to our residents and build that trust. The notion of trust building is important, and I think anyone who manages brands understands that.”

Familiar Faces, Newfound Partnerships
Bank of America’s involvement with Washington View spans nearly three decades. In 1996, NationsBank purchased Washington View for $4.5 million, enlisting WC Smith to oversee management and rehabilitation. NationsBank merged with BankAmerica Corp. to become Bank of America in 1998, and in 2004, the complex was acquired by area firm WC Smith, which owned and operated the property until its sale to NHT.

Since the 2004 sale to WC Smith, Bank of America’s presence in the neighborhood has remained, shifting its focus beyond property investments to longer-term community investment. When it comes to food security and public health partnerships, this follows with Johnson’s characterization of the attitudes in the boardroom.

“We don’t approach it from an owner standpoint; we’re trying to approach this as a partnership, a collaboration,” she says. “All of our partners are aligned…we would love to see this become something that is essentially owned by the community.”