QCT Table Generator -- QCT Designation Algorithm

This page provides the algorithm used to designate the 2017 Qualified Census Tracts (QCTs). Carefully following this algorithm and applying it to data extracted from this site should allow you to reproduce the 2017 QCT designation results. Variable names, highlighted as bold-italic, refer to those used in the data extract.

Compute average household size ((p0010001 - p0420001) / p0150001) with a cap of 8 and a floor of 1. Set average household size to zero if there are no households (p0150001 = 0).

Note:

Compute the tract average household size adjusted income limit (TAHSAIL) rounded to the dollar. The adjustment is minus 10 percent for every person less than 4, and plus 8 percent for every person more than 4, relative to (1.2 * VLIL_4_Person). For example, if tract average household size is 2.25, TAHSAIL = 0.825 * (1.2 * VLIL_4_Person); if tract average household size is 1, TAHSAIL = 0.70 * (1.2 * VLIL_4_Person); and if tract average household size is 8, TAHSAIL = 1.32 * (1.2 * VLIL_4_Person).

Compute the ratio of the TAHSAIL to the tract median household income B19013est1. Set TAHSAIL equal to zero if the margin of error for the tract median household income estimate B19013me1 exceeds half of the tract median household income estimate B19013est1, or if there are no households (p0150001 = 0). A tract is eligible by the income criterion if the tract median household income is less than or equal to the TAHSAIL (the ratio is greater than or equal to 1), meaning 50 percent or more of tract households have incomes below the TAHSAIL, for at least 2 of the 3 evaluation years.

Compute the poverty rate as the ratio of the population below poverty to the population for whom poverty status has been determined (B17001est2 / B17001est1) rounded to 3 decimal places; but set the poverty rate to zero if the margin of error for the estimate of the population below poverty B17001me2 exceeds half of the estimate of the population below poverty B17001est2. A tract is eligible by the poverty criterion if the poverty rate is 0.250 or higher, for at least 2 of the 3 evaluation years.

Average the poverty rates over the 3 years. Average the ratios of the TAHSAIL to the tract median household income over the 3 years.

The CBSA or state nonmetropolitan population is given as AREA_POP. If the aggregate population of all eligible census tracts is not more than than 20 percent of AREA_POP rounded to the nearest person, then all of the eligible tracts are designated QCTs, and the process is complete. If the aggregate population of the eligible census tracts exceeds 20 percent of AREA_POP rounded to the nearest person, then continue with the following steps.

Within each CBSA (note that the value of CBSA is 100000 x STATE for nonmetropolitan tracts), rank the tracts that are eligible by either criterion in ascending order by averaged poverty rate and separately by averaged ratio of the TAHSAIL to the tract median household income. Do not include ineligible tracts in the ranking. For example, if there are 100 eligible tracts out of 700 total tracts, the eligible tract with the highest averaged poverty rate gets ranking number 100, and the eligible tract with the lowest averaged poverty rate gets ranking number 1. A similar process applies to the averaged ratio of the TAHSAIL to the tract median household income.

Compute the average ranking by summing the two rankings and dividing by 2, and adding 10,000 to the average rank if the tracts are eligible under both criteria. Ineligible tracts are assigned an average rank of zero.

Sort the tracts within each CBSA in descending order by average rank (primary sort) and p0010001 (secondary sort, i.e., if two tracts have the same average rank, the larger population tract should come first). Starting with the highest average ranked tract, designate as QCTs, and sum the p0010001 population of, the eligible tracts working down the list until adding the p0010001 of the next eligible tract would cause the cumulative population of designated tracts to exceed 20 percent of AREA_POP rounded to the nearest person. DO NOT designate this tract, but check for other eligible tracts with smaller populations ranked below to see if any can be designated QCTs without exceeding the cap.

To view the location of the 2016 and 2017 QCTs and SDDAs, visit the HUD User GIS Service -- Low-Income Housing Tax Credit Qualified Census Tract (QCT) and Small Difficult Development Area (SDDA) Locator.

Problems or questions? Contact Michael.K.Hollar@hud.gov.