QCT Table Generator -- QCT Designation Algorithm

This page provides the algorithm used to designate the 2008 Qualified Census Tracts (QCTs). Carefully following this algorithm and applying it to data extracted from this site should allow you to reproduce the 2008 QCT designation results. Variable names, highlighted as bold-italic, refer to those used in the data extract.

1. Compute total number of households with measured income (sum of hhincXXs).


2. Compute average household size (P016001 / P15001) with a cap of 8 and a floor of 1.


3. Compute the tract average household size adjusted income limit (TAHSAIL) rounded to the dollar. The adjustment is minus10 percent for every person less than 4, and plus 8 percent for every person more than 4 relative to AMGI60PC. For example, if tract average household size is 2.25, TAHSAIL = 0.825 * AMGI60PC; if tract average household size is 1, TAHSAIL = 0.70 * AMGI60PC; and if tract average household size is 8, TAHSAIL = 1.32 * AMGI60PC.


4. Compute the number of households, rounded to the nearest integer, at or below the TAHSAIL from the hhincXX distribution table. Use linear interpolation to estimate the number of households at or below the TAHSAIL when the TAHSAIL does not fall on a distribution table cell boundary.


5. Compute the proportion of households below the TAHSAIL rounded to 3 decimal places. Use the sum of households across the income categories of the hhincXX distribution table as the demonimator. A tract is eligible by the income criterion if this proportion is 0.500 or higher.


6. Compute the poverty rate (P087002 / P087001) rounded to 3 decimal places. A tract is eligible by the poverty criterion if this proportion is 0.250 or higher.


7. The CBSA or state nonmetropolitan population is given as AREAPOP. If the aggregate population of all eligible census tracts is not more than than 20 percent (rounded to the nearest integer) of AREAPOP, 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 AREAPOP, then continue with the following steps.


8. Within each CBSA (note that the value of CBSA is 100000 + STATE for nonmetropolitan tracts), rank the tracts eligible by either criterion in ascending order by poverty rate and separately by proportion of households below the TAHSAIL. For example, if there are 100 eligible tracts, the eligible tract with the highest poverty rate gets ranking number 100, and the eligible tract with the lowest poverty rate gets ranking number 1. A similar process applies to the proportion of households below the TAHSAIL.


9. 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.


10. Sort the tracts within each CBSA in descending order by average rank (primary sort) and POP100 (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 POP100 population of, the eligible tracts working down the list until adding the POP100 of the next eligible tract would cause the cumulative population of designated tracts to exceed 20 percent of AREAPOP rounded to the nearest integer. 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 determine the census tract number for a particular address, visit the HUD User GIS Service -- Low-Income Housing Tax Credit Qualified Census Tract (QCT) Locator, or for Guam and Northern Marianas Island locations, the Small Business Administration (SBA) HUB Zone Locator.

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