Low-Income Housing Development, Poverty Concentration, and Neighborhood Inequality

Abstract

Considerable debate exists about the merits of place-based programs that steer new development, and particularly affordable housing development, into low-income neighborhoods. Exploiting quasi-experimental variation in incentives to construct and rehabilitate rental housing across neighborhoods generated by Low-Income Housing Tax Credit (LIHTC) program rules, we explore the impacts of subsidized development on local housing construction, poverty concentration, and neighborhood inequality. While a large fraction of rental housing development spurred by the program is offset by a reduction in the number of new unsubsidized units, housing investment under the LIHTC has measurable effects on the distribution of income within and across communities. However, there is little evidence the program contributes meaningfully to poverty concentration or residential segregation. C 2015 by the Association for Public Policy Analysis and Management.

Low-Income Housing Tax Credit Developments and Neighborhood Property Conditions

“…Other potential negative (from some owners' perspectives) neighborhood impacts of proximity to subsidized housing have also permeated the conventional wisdomspecifically, racial and income transition and/or concentration. Nevertheless, in reviewing the literature, Freeman and Botein (2002) Delang and Lung, 2011; Horn and O'Regan, 2011), an arguably more generalizable study by Freeman (2003) and recent research from Freedman and McGavock (2015) find no such relationship.…”

Understanding Affordable Housing in the Context of Sustainable Development

“…There is a risk, however, that the design of current policies may create concentration of certain groups (minorities or poor households in general) in specific areas of cities or outskirts of cities, which would make integration and inclusion of said groups more difficult. This means that there are arguments in favor of, for instance, subsidized housing development in lowincome areas as it would contribute to revitalize said areas; but there would also be arguments against it, insofar it could contribute to residential segregation, or it could alter the composition of the neighborhood, discouraging others to live there (Freedman and McGavock 2015). In essence, it could be the case that some existing policies may be contributing to the perpetuation of the problems they intended to solve, such as "slum clearance" (Collinson et al 2015).…”

“…In relation to both strands of research and sometimes linked to one or both of them, there is a big interest in the analysis of the relationship between housing affordability and inequality (Ben-Shahar et al 2018;Desmond and Bell 2015;Freedman and McGavock 2015;Matlack and Vigdor 2008). As it couldn't be otherwise, there is also interest in the effect that certain policies can have on housing affordability (Enström öst 2014;Li 2014).…”

The impact of the low-income housing tax credit on children's health and wellbeing in Georgia

“…For instance, in Texas, rehabilitated LIHTC units positively influenced school performance in lower income areas (Di & Murdoch, 2013). Additionally, poverty rates have been found to decline in high-poverty neighborhoods after the completion of LIHTC developments, and in general, there is little evidence that the LIHTC program contributes to poverty concentration or residential segregation (Ellen, Horn, & O’Regan, 2016; Freedman & McGavock, 2015; Horn & O’Regan, 2011). There are mixed findings regarding the impact of affordable housing on the stability of the surrounding community, but generally, associations between subsidized housing developments and neighborhood crime are weak or insignificant, suggesting that some concerns about affordable housing may be misguided (Albright et al, 2013; Ellen, Lens, & O’Regan, 2012; Freedman & Owens, 2011; Lens, 2014).…”