The Spatial Pattern of Low Income Housing Tax Credit Properties: Implications for Fair Housing and Poverty Deconcentration Policies

Abstract

Problem, research strategy, and findings: Housing policies of the U.S. Department of Housing and Urban Development (HUD) emphasize the spatial dispersal of housing assistance to promote fair housing objectives. The Low Income Housing Tax Credit (LIHTC) program, the nation's largest affordable housing subsidy program, is not administered by HUD and therefore is not closely monitored for compliance with dispersal objectives. Using spatial point pattern analyses, I identify the geographic extent of LIHTC property clustering, characterize the local clustering of individual properties and explore the determinants of local clustering within the nation's largest metropolitan areas. In most metropolitan areas, LIHTC properties are more highly clustered than multifamily housing units, although the extent of clustering differs by metropolitan area. Clustered LIHTC properties tend to be located in more densely developed central-city locations that have higher poverty rates and higher minority concentrations. Takeaway for practice: To encourage more affordable housing construction within areas that offer greater economic and social opportunities to LHTC residents, policymakers should 1) provide incentives to locate LIHTC properties within high-opportunity areas, 2) eliminate current incentives to cluster housing in areas with inherently higher poverty and minority concentrations (Qualified Census Tracts and Difficult Development Areas), and 3) enhance coordination between HUD and the Department of the Treasury to implement federal fair housing goals.