Low-Income Housing Tax Credit Program Research Articles

Does the Low-Income Housing Tax Credit Program Expand Access to Opportunity Neighborhoods? Tracking Movements of Low-Income Tenants in California

The Low-Income Housing Tax Credit (LIHTC) program can potentially help expand access to neighborhoods with low poverty and economic opportunities for low-income households. Prior studies described that LIHTC units are in neighborhoods with relatively high poverty, but with improvements in recent years. Beyond cross-sectional analyses, scholars have not extensively looked at the movements of tenants. It remains unclear whether the program creates opportunities for low-income households to move into better neighborhoods than they previously lived in or reinforces segregation by encouraging moves to similarly or more disadvantaged neighborhoods. Using an extensive consumer database, I am tracking the movements of households who move into new LIHTC properties in California. The experimental findings show that residents experience, on average, increases in poverty exposure by up to six percentage points over other moved low-income renters. Tenants see lower levels of neighborhood amenities than at their previous addresses. The construction of LIHTC housing can increase the chance of households moving into minority-concentrated areas.

Producing affordable housing in higher-opportunity neighborhoods: Incentives in California’s LIHTC program

ABSTRACT Housing policy shapes where low-income families live and whether they can access neighborhoods that promote children’s well-being. Since 2018, California’s Low-Income Housing Tax Credit (LIHTC) program has incentivized the development of family affordable housing in higher-resource areas. We examine how the location of proposed and funded LIHTC developments changed in response to these incentives. We find that the probability that large family projects—those eligible for incentives—were proposed in higher-resource areas increased from 0.19 to 0.29, comparing 2014-2017 and 2018–2021. The probability that funded large family projects were located in higher-resource areas doubled, from 0.15 to 0.30. The probability of location in higher-resource areas declined for developments ineligible for incentives. Interviews with affordable housing developers illuminate the role of mission and resources in shaping their responses to program incentives. We conclude with a broader discussion of the LIHTC program as a tool for reducing neighborhood inequality.

Affordable housing through the Low-Income Housing Tax Credit program and opioid overdose emergency department visits

IntroductionThe United States continues to experience an opioid overdose crisis. As a key social determinant of health, housing insecurity may contribute to initiation of substance use and can threaten outcomes for those with substance use disorders by increasing stress, risky substance use, discontinuity of treatment, and return to use, all of which may increase the risk of overdose. The Low-Income Housing Tax Credit (LIHTC) program supports access to rental housing for low-income populations. By facilitating access to affordable housing, this program may improve housing security, thereby reducing overdose risk. MethodsWe used data from LIHTC Property Data and the State Emergency Department Database (SEDD) to identify the number of LIHTC units available and opioid overdoses discharged from the emergency department (ED) in 13 states between 2005 and 2014. ResultsBetween 2005 and 2014, mean opioid overdose ED visits were higher in states with fewer LIHTC units (<28 LIHTC units per 100,000 population) at 26.5 per 100,000 population as compared to states with higher LIHTC units (≥28 LIHTC units per 100,000 population) at 21.1 per 100,000. We find that greater availability of LIHTC units was associated with decreased rates of opioid overdose ED visits (RR 0.94; CI 0.90, 1.00). ConclusionsGiven the importance of housing as a key social determinant of health, the provision of affordable housing may mitigate substance misuse and prevent nonfatal opioid overdose.

A Missed Opportunity? The 4% Low-Income Housing Tax Credit Program

The Low-Income Housing Tax Credit program is the largest housing production subsidy in the U.S. Two types of credit, known as the 9% credit and the 4% credit, are subject to different allocation criteria. The 4% program has been flying under the radar of policymakers, housing advocates, and researchers since its inception. Whereas newly constructed 9% units are increasingly sited in lower poverty neighborhoods, 4% investment is made in high-poverty and low-opportunity neighborhoods. This paper reveals that states have not actively influenced the locational outcomes of 4% projects credit until recently. Policy levers have a more substantial impact on the outcomes of the 9% program. However, the results indicate that increased competition and strong policy levers have enabled some states to influence the siting outcomes of 4% projects. As states have significant power over tax credit allocations and additional financing required to enable the 4% credit, they could consider explicitly using this credit to further fair housing goals and help low-income households reach opportunities. However, careful consideration is needed to balance these goals with neighborhood revitalization.

Shaping a Healthier LIHTC Housing Stock: Examining the Role of States’ Qualified Allocation Plans

The physical environment has a powerful impact on our physical and mental health, especially in our homes. One vehicle for advancing a healthier affordable housing stock is the Low-Income Housing Tax Credit (LIHTC). The aim of this research was to examine the manner and extent to which various housing quality provisions pertaining to health are embedded in the Qualified Allocation Plan (QAP) of the LIHTC program. From content analysis of the QAP of each of the 50 states and a survey of state housing finance agencies (HFAs), results revealed that: the most frequently required healthy housing provisions address housing quality, whereas the most incentivized ones address proximity to neighborhood services and amenities; few states bundle high-priority provisions relevant to asthma, respiratory health and toxic exposures, which are major health concerns for vulnerable children; the top two motivators for considering healthy housing provisions in the LIHTC process were “championship and initiation by agency staff” and “learning of similar practices in other states”; among other findings. Recommendations are made for HFA practices, and directions for future research are proposed.

The Low-Income Housing Tax Credit Program: A Multicity Rent Savings Analysis

The paper utilizes actual Low-Income Housing Tax Credit (LIHTC) rents rather than federally mandated maximum rents to evaluate LIHTC rent savings in 12 diverse housing markets across the United States. Monthly rent savings are greatest in large cities with strong housing markets (Chicago, Illinois; Miami, Florida; San Jose, California; and Washington, DC), ranging from $708 for a new one-bedroom unit in Miami to $1,114 for a new two-bedroom unit in San Jose. Monthly rent savings in mid-sized cities with weaker housing markets (Albuquerque, New Mexico; Buffalo, New York; Indianapolis, Indiana; and Louisville, Kentucky) and small cities with stronger housing markets (Manchester, New Hampshire, and Midland, Texas) are comparable, ranging from $108 for a new one-bedroom unit in Midland to $725 for a new three-bedroom unit in Indianapolis. Rent savings are considerably less in small cities with weak housing markets (Sioux Falls, South Dakota; and Billings, Montana). Meanwhile, nationwide, rent savings decline as properties age.

In Harm's Way? The Effect of Disasters on the Magnitude and Location of Low‐Income Housing Tax Credit Allocations

AbstractThis paper analyzes the effect of disasters on affordable housing construction. Exploiting the exogenous timing of disasters and 26 years of affordable housing data, we derive causal estimates of the effect of severe floods on county‐level Low‐Income Housing Tax Credit (LIHTC) allocations nationwide. We find that states respond to severe floods by increasing the number of LIHTC units per capita allocated to a flood‐struck county by 57 percent in the year after the disaster, compared to other years. We argue that this increased allocation of LIHTC units is indicative of a process of institutional or policy conversion, in which states are repurposing the three‐decade‐old housing tax credit program to meet contemporary disaster assistance and recovery needs. Given that the LIHTC program was not designed with disasters in mind, do the new units ameliorate or exacerbate renters' exposure to disaster risk? We find that severe floods are associated with a significant increase in LIHTC units per capita allocated outside of the 500‐year floodplain in an affected county within the three years after a severe flood. These findings suggest that states and housing developers are using the LIHTC program to support disaster recovery by expanding subsidized rental options in disaster‐struck counties and ameliorating risk to low‐income renters by locating those units outside of floodplains.

The Association of Low-Income Housing Tax Credit Units and Reports of Child Abuse and Neglect

Poverty broadly and financial stress owing to housing insecurity specifically are associated with an increased risk of child maltreatment. Therefore, it is possible that a program designed to increase access to affordable housing such as the Low-Income Housing Tax Credit program could reduce child maltreatment. The purpose of this study is to examine the association of the availability of housing units through the Low-Income Housing Tax Credit Program with the rates of child maltreatment reports, including reports for physical abuse and neglect, at the state and county levels. Data were from the 2005‒2015 National Child Abuse and Neglect Data System and the Low-Income Housing Tax Credit Program database. Generalized estimating equations were conducted in 2021 to calculate rate ratios and 95% CIs, adjusting for relevant confounders. At the state level, ≥25 compared with <25 Low-Income Housing Tax Credit Program units per 100,000 population was associated with a lower rate of overall child maltreatment (i.e., neglect and physical abuse; rate ratio=0.96, 95% CI=0.93, 0.99), neglect (rate ratio=0.96, 95% CI=0.94, 0.99), and physical abuse (rate ratio=0.96, 95% CI=0.93, 1.00) reports. Similarly, at the county level, ≥1 compared with 0 Low-Income Housing Tax Credit Program units per 100,000 population was associated with a lower rate of overall child maltreatment (rate ratio=0.94, 95% CI=0.92, 0.97), neglect (rate ratio=0.96, 95% CI=0.93, 0.98), and physical abuse (rate ratio=0.94, 95% CI=0.91, 0.98) reports. Increasing access to affordable housing may be an effective strategy to reduce child maltreatment at both the state and county levels.

Affordable housing through the low-income housing tax credit program and intimate partner violence-related homicide

The most severe outcome of intimate partner violence (IPV) is IPV-related homicide. Access to affordable housing may both facilitate exit from abusive relationships and reduce financial stress in intimate relationships, potentially preventing IPV-related homicide. We examined the association of the availability of rental housing through the Low-Income Housing Tax Credit (LIHTC) program, a federal program providing tax incentives to support the development of affordable housing, with IPV-related homicide and assessed whether this association differed by eviction rates at the state-level. We used 2005–2016 National Violent Death Reporting System, LIHTC Property, and Eviction Lab data for 13 states and compared the rate of IPV-related homicide in state-years with ≥30 to state-years with <30 LIHTC units per 100,000 population, overall and stratified by eviction rates. We conducted analyses in fall 2020. Adjusting for potential state-level confounders, the rate of IPV-related homicide in state-years with ≥30 LIHTC units per 100,000 population was lower than in state-years with <30 LIHTC units per 100,000 population (RR = 0.89, 95% CI 0.81, 0.98). The reduction in the rate of IPV-related homicide was slightly larger in state-years with higher eviction rates (≥3500 evictions per 100,000 renter population; RR = 0.83, 95% CI 0.74, 0.93) compared to state-years with lower eviction rates (<3500 evictions per 100,000 renter population; RR = 0.91, 95% CI 0.81, 1.03). Overall, at the state-level, increased availability of affordable housing through the LIHTC program was associated with lower rates of IPV-related homicide. Increasing the availability of affordable housing may be one tool for preventing IPV-related homicide.

Neighbourhood opportunity, racial segregation, and the Low-Income Housing Tax Credit program in the United States

Housing policy for low-income renters seeks to deconcentrate poverty by moving the poor to neighborhoods offering opportunities for safety, good education, and gainful employment. Federal law compels communities to take affirmative steps to promote racial and ethnic integration. We argue that it is not possible for a community to effectively deconcentrate poverty unless it actively engages in racial and ethnic integration. This research evaluates the Low-Income Housing Tax Credit (LIHTC) in terms of both poverty deconcentration and racial integration. It asks if the LIHTC program is helping move low-income families to neighbourhoods offering high levels of opportunity categorized by the dominant racial and ethnic group. Given the lack of high-opportunity tracts among minority concentrated tracts, there is effectively no mechanism through which the LIHTC program can locate developments in minority dominated high-opportunity tracts and achieve movement to opportunity. If the LIHTC program is to further poverty deconcentration through movement to high-opportunity areas, it must also affirmatively further fair housing.

Weather or Not: Tracking Hurricanes and Changes to Low-Income Housing Tax Credit Program Plans

ABSTRACT Climate change poses many threats to residential communities throughout the United States, including by contributing to the increased intensity and duration of disasters like hurricanes and other weather events. Government housing policies may either reduce or amplify vulnerability to storm damage. This article explores how state governments guide affordable housing development to address the risk and damage from hurricanes through the Low-Income Housing Tax Credit (LIHTC) program. Using document review, we examine LIHTC plans for states most severely and less severely affected by major hurricanes in the past 20 years by comparing plans before and after a hurricane event. The results indicate that severely affected states make relatively few changes to their plans after a hurricane, compared with neighboring less affected states, regarding siting and location, construction techniques, disaster preparedness, or other storm-related responses. The findings suggest a missed opportunity to redirect affordable housing resources to better protect vulnerable residents from the risks of climate change.

Labor Market Impacts of Exposure to Affordable Housing Supply: Evidence from the Low-Income Housing Tax Credit Program

Labor Market Impacts of Exposure to Affordable Housing Supply: Evidence from the Low-Income Housing Tax Credit Program

Evaluating Exposure to Crime Among LIHTC Building Types and Characteristics in Ohio

Studies on the Low-Income Housing Tax Credit (LIHTC) program have found that whereas LIHTC buildings are more likely to be placed in regions with higher crime incidence, the construction of a unit has either a negative or a neutral impact on crime. Few studies, however, account for the substantial variation in building type and building characteristics that exist within the LIHTC program. This article focuses on a subset of 462 buildings in Ohio to analyze how building type and building characteristics may influence violent crime exposure at the time of placement and over time. We find both initial crime exposure and change in crime over time varied by building type and characteristics. General occupancy buildings were placed in areas with significantly higher crime rates than in the locations where senior buildings were placed. Regional density and unit concentration were significantly associated with crime at placement and over time. Scattered-site buildings were most highly associated with higher crime exposure at placement and with crime increases over time. We use these findings to provide recommendations for researchers and state policymakers as they construct Qualified Allocation Plans.

Meeting the needs of low-income housing for senior and disabled populations: an analysis of low-income housing tax credit residents in Ohio

ABSTRACT This article examines the preferences, satisfaction, and perceived ability to age in place for 633 Ohioans living in housing subsidized by the Low-Income Housing Tax Credit (LIHTC) program. Using resident responses to a survey, we examine how these items may vary by age and disability status. While all residents prioritize affordability and safety, other preferences vary by age and mobility disability. All residents show high levels of satisfaction with both housing and neighborhood components, however, senior citizens demonstrate higher overall housing satisfaction and perceived ability to age in place. This paper highlights the challenges for affordability and accessibility for residents in developments subsidized by the LIHTC program, despite age or disability status, but argues that age and mobility disability should be considered when designing LIHTC housing.

Balancing act: the effects of race and poverty on LIHTC development in Boston

The debate about where to build affordable housing remains unresolved. Fair housing advocates encourage placement in low poverty neighborhoods while community development proponents support the opposite approach. Prior work notes the Low-Income Housing Tax Credit (LIHTC) program is disproportionately found in Black and poor areas but the results are based on 20-year old data and ignore effects within LIHTC neighborhoods. This paper uses recent data and multivariate analysis to explore the impact of neighborhood racial composition and poverty rate on LIHTC development in the Boston metropolitan region. We find race is associated with the presence of LIHTC development while poverty is associated with the amount of LIHTC housing built, which reveals important differences between project siting and size. LIHTC units are not more heavily concentrated in Black or poor neighborhoods, conditional on LIHTC development. The findings suggest how the LIHTC program can be used to balance competing fair housing and community development priorities in developing affordable housing.

The Low-Income Housing Tax Credit Program: An Evaluation of Household Rent Savings

This paper presents an interdisciplinary overview and a robust discussion of various aspects of the Low-Income Housing Tax Credit (LIHTC) program. The study also evaluates rent savings accruing to LIHTC households in St. Louis, Missouri, by using a two-stage empirical procedure with generalized linear models (GLMs). Rent savings varied by unit type and decreased progressively during a project’s life cycle. The LIHTC household’s rent savings in St. Louis ranged from $139 per month on older (30-year-old) studio/one-bathroom units, to a maximum of $546 per month on new (1-year-old) two-bedroom/two-bathroom units.

What Should Be the Future of the Low-Income Housing Tax Credit Program?

ABSTRACTThis research examines the Low-Income Housing Tax Credit (LIHTC) developments in metropolitan areas nationwide. The results indicate that the LIHTC program contributes to the spatial concentration of poverty as well as of racial and ethnic minorities. The program is not promoting mixed-income housing. The program is serving an income category with very little need for additional units and is not serving those with a need. Finally, the program is increasing the rental housing stock in soft markets and failing to increase the supply in tight ones. It is recommended that states adopt allocation standards that would deconcentrate poverty and affirmatively further fair housing. The benefits of the program should be reconfigured to promote mixed-income housing. The LIHTC program should permit states to exchange tax-credit authority for vouchers, to better serve the poorest households. The program should exercise greater rigor in market analysis so that new units are added only in tight markets and deteriorated units are rehabilitated elsewhere.

Rural Affordable Rental Housing: Quantifying Need, Reviewing Recent Federal Support, and Assessing the Use of Low Income Housing Tax Credits in Rural Areas

Recently, there has been significant interest in the high levels of rental cost burden being experienced across the United States. Much of this scholarship has focused on rental cost burdens in larger urban areas, or at the national level, and has not explored differences in the prevalence of rental cost burden in urban versus rural communities. In this paper, I find that rental cost burdens are a challenge facing both urban and rural communities. However, despite the need for affordable rental housing in rural communities identified, I find the amount of resources made available by the federal government to address this challenge are at a low point relative to recent history. My analysis of federal resource availability also finds one program has been an important and resilient tool for the development and preservation of affordable housing in urban and rural communities: the Low Income Housing Tax Credit (LIHTC) program. Congress delegated much of the LIHTC program’s implementation to the states, whereby states choose many of the factors to prioritize when allocating LIHTCs to specific projects. Therefore, I explored each state’s qualified allocation plan to identify whether specific factors make it more or less likely rural areas will receive a “fair share” of LIHTC allocations based on their need relative to non-rural areas. My analysis did not identify a specific factor or set of factors that systematically increased or decreased the likelihood of allocations being proportionate to the relative needs of a state’s rural communities. However, I did identify a number of factors that by their very design appeared to affect positively or negatively the likelihood that specific types of projects or project locations would receive allocations. Interviews with industry stakeholders confirmed that many of these factors are affecting developer decisions and may be unintentionally disadvantaging smaller, more remote rural projects.

Overview and proposed reforms of the low-income housing tax credit program

•The Low-Income Housing Tax Credit (LIHTC) cost US taxpayers $8.4 billion in 2017.•The LIHTC subsidizes up to 103% of non-land development cost of rent-restricted units.•States receive equal per-capita allocations regardless of whether housing is affordable.•Future allocations should be made refundable and targeted to markets with greatest need.

Comparing Opportunity Metrics and Locational Outcomes in the Low-Income Housing Tax Credit Program

The Low-Income Housing Tax Credit (LIHTC) has been criticized for concentrating units in poor minority neighborhoods. This study analyzes the distribution of LIHTC units in San Antonio and assesses the opportunity provision in Texas’s 2016 Qualified Allocation Plan (QAP). Results indicate that since the incorporation of the opportunity provision in 2009, more tax credits have been allocated to neighborhoods with lower poverty and higher racial diversity. Maximum scoring neighborhoods in the current QAP are located in low-poverty communities that perform above average in socioeconomic conditions, but below average in accessibility and sustainable healthy environments.