- Main
Affordable Housing in High Opportunity Areas: Insights for Fair Housing Advocates
- Proussaloglou, Emmanuel
- Advisor(s): Monkkonen, Paavo
Abstract
The Low Income Housing Tax Credit (LIHTC) program is responsible for the lion’s share of new affordable housing development in the United States. Since 1986, LIHTC has funded the construction of approximately 2.5 million units. A disproportionate number of these units, 90%, have been built in disadvantaged neighborhoods, despite the recent efforts of policymakers to direct construction to so-called high opportunity areas – census tracts with low poverty levels that provide economic and educational opportunities for residents.
In this thesis, I ask whether there are statistically significant differences between LIHTC projects built in high opportunity areas compared with projects built elsewhere. Theory suggests that there will be, as high opportunity areas are often zoned for single-family housing and have particularly restrictive anti-development residents and building regulations. I answer this question using data from the Department of Housing and Urban Development (HUD), the National Housing Preservation Database (NHPD), the Federal Housing and Finance Administration (FHFA), the US Census (ACS 5-year estimates), and metro area parcel databases.
My findings show statistically significant differences between LIHTC projects built in high-opportunity tracts and those built elsewhere within metropolitan areas. I categorize the differences along three dimensions – physical, administrative, and geographic. Physically, high opportunity-sited projects have more units, and these units are more likely to be predominantly studio/1 bedroom while noticeably avoiding predominantly 3-or-more bedroom units. These projects are also more likely to be new construction buildings and to have 100% of their units designated affordable (particularly 9% financed projects) rather than being mixed between affordable and market rate. Simultaneously, they are more likely to be on large lots, built at low residential densities, physically low in height, contextually designed, and characterized by welcoming and varied street facades, all characteristics that help allay anti-development sentiments.
Administratively, projects built in high opportunity areas are more likely to be targeted towards elderly/disabled populations, financed using 4% tax credits, owned by for-profit companies, and built after 2016 or before 2002 (particularly 4% financed projects). In recent years the positive high opportunity associations for number of units and 4% financing have fallen away.
Geographically, these projects are more likely to be sited on the West coast in populous Metropolitan Statistical Areas (MSAs) with either high home values or low home values, while avoiding MSAs in the middle of the home value distribution.
Much of the existing literature on LIHTC focuses on evaluating policies that impact where affordable housing is built, ignoring what kinds of buildings are built in different neighborhood contexts. This paper fills this gap by investigating the granular physical and administrative characteristics of projects at the individual address level. Accepting the complicated regulatory framework as given, understanding the projects that have successfully navigated through it can offer timely insights relevant to practitioners today. We know that high opportunity neighborhoods have particularly significant economic, health, and educational impacts on residents. This research can help guide future high opportunity development.
Main Content
Enter the password to open this PDF file:
-
-
-
-
-
-
-
-
-
-
-
-
-
-