Affordable Housing after Flood Disasters: The Role of Disaster Recovery Provisions in LIHTC Qualified Allocation Plans

Climate change is increasing the frequency and severity of natural disasters, creating growing challenges for housing recovery, particularly for low-income renters. The Low-Income Housing Tax Credit (LIHTC) program is the primary federal tool for financing affordable rental housing. States administer LIHTC through Qualified Allocation Plans (QAPs) that establish criteria for competitively allocating the tax credits. Some states have introduced disaster recovery provisions in their QAPs to prioritize affordable development in disaster-affected areas. This study examines whether these provisions influence LIHTC allocations following flood disasters. I construct an original dataset of disaster recovery provisions by coding QAPs across states and years and merge these data with county-level flood disaster records and LIHTC allocation data from 2003-2019. Using a distributed lag model with county and year fixed effects, I find that disaster provisions are associated with modest increases in LIHTC allocations to affected counties, with the most consistent effects emerging approximately three years after a flood disaster. The results suggest that state QAPs can serve as a policy lever for supporting long-term housing recovery, while highlighting the constraints of relying on LIHTC as a primary disaster recovery tool for low-income renters.