Measuring the Differentiated Impact of New Low-Income Housing Tax Credit (LIHTC) Projects on Households’ Movements by Income Level within Urban Areas

Sohyun Park,Hui Jeong Ha,Jinhyung Lee,Aram Yang

doi:10.3390/urbansci5040079

Sohyun Park, Hui Jeong Ha + Show 2 more

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https://doi.org/10.3390/urbansci5040079

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Journal: Urban Science	Publication Date: Oct 15, 2021
Citations: 3	License type: CC BY 4.0

Affiliation: The Ohio State University, Western University

Abstract

Social mixing is one of the key objectives of the housing policy in OECD countries. The Low-Income Housing Tax Credit (LIHTC) program, the largest affordable housing construction program in the US since 1986, has recently set creating mixed-income communities as one of the standards. As a project-based program, LIHTC developments are likely to influence residential mobility; however, little is known about its empirical effects. This study investigated whether new LIHTC projects are effective at attracting heterogeneous income groups to LIHTC neighborhoods, thereby contributing to creating mixed-income communities. Using unique individual-level household movement data combined with origin–destination neighborhood characteristics, we developed zero-inflated negative binomial (ZINB) models to analyze the LIHTC’s impact on residential mobility patterns in Franklin County, Ohio, US, from 2011 to 2015. The results suggest that the LIHTC attracts low-income households while deterring higher-income families, and therefore the program is not proved to be effective at creating mixed-income neighborhoods.

Highlights

In response to worsening spatial separations of rich versus poor households in terms of income, educational attainment, and jobs [1,2], deconcentrating poverty through creating mixed-income neighborhoods has been a significant focus of urban and housing policy in a number of OECD countries [3,4,5]
Before we dive into gravity models, we began by visualizing household movement patterns to explore the effectiveness of new Low-Income Housing Tax Credit (LIHTC) units in attracting diverse income groups into LIHTC-deployed neighborhoods
Our empirical findings suggested that LIHTC projects influenced citywide residential mobility patterns and that the impact varied across income levels

Summary

Introduction

In response to worsening spatial separations of rich versus poor households in terms of income, educational attainment, and jobs [1,2], deconcentrating poverty through creating mixed-income neighborhoods has been a significant focus of urban and housing policy in a number of OECD countries [3,4,5]. Considerable efforts have been devoted to ensuring the availability of housing in quality neighborhoods for low-income families while attracting more affluent residents to high-poverty areas [6]. At present, deconcentrating poverty and creating mixed-income communities have become new standards to plan and evaluate housing programs (for example, housing choice vouchers and low-income housing tax credits) [7]. While the program does not have an explicit income-mixing aim, LIHTC developments are not free from mainstream affordable housing policies. LIHTC developments basically expand housing choices available to low-income families so that the quality of neighborhoods for many low-income families are often determined by the LIHTC’s location. LIHTC properties have spillover effects on surrounding public safety and private investment [9,10], which possibly influences residential mobility patterns, thereby changing socioeconomic compositions of neighborhoods in urban areas

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