Publications

  • The Effects of the Low-Income Housing Tax Credit (LIHTC)

    The Low-Income Housing Tax Credit (LIHTC) Program is the largest federal subsidy for the development and preservation of affordable housing. Since it was established by the Tax Reform Act of 1986, LIHTC has financed the development and preservation of more than 2.1 million units in over 28,000 developments across the country. As federal tax reform looms, however, there is growing uncertainty surrounding the future of LIHTC. In contemplation of debate about these possible changes, this brief explores what we know about who LIHTC serves and what research has shown about the impact of the program.

  • Utility Allowances in Federally Subsidized Multifamily Housing

    This paper provides an analysis of the statutes, regulations, and guidance that govern the treatment of utility costs in the four largest federal subsidized housing programs—Public Housing, Project-Based Section 8, Housing Choice Vouchers, and Low-Income Housing Tax Credits—and the incentives these rules create for the consumption of utilities. It finds that many of these programs are structured such that tenants and owners are either indifferent about utility costs or are rewarded for overconsumption. This paper makes several recommendation for how these programs can be restructured to incentivize lower utility consumption, which can reduce the environmental footprint of subsidized housing, improve the financial viability of existing subsidized properties, and free resources that can be repurposed for other HUD goals.

  • Effect of QAP Incentives on the Location of LIHTC Properties

    Recent research has examined the siting patterns of Low Income Housing Tax Credit (LIHTC) developments, but the reality is that the LIHTC program is not one uniform, national program. Rather, the program is administered by state allocating agencies, each of which has considerable discretion over how to allocate tax credits. In particular, each state issues a Qualified Allocation Plan (QAP), which outlines the selection criteria the state will use when awarding its nine percent tax credits. Some criteria are required by the federal government, such as setting aside at least 10 percent of credits for nonprofit developers and using the minimum amount of tax credit financing feasible. However, states are also allowed to adopt additional criteria that further the state’s housing policy and other goals, such as providing set-asides for developments with existing housing subsidies, including the HOPE VI Program, or awarding bonus points for locating developments in particular types of neighborhoods. As the competition for credits has increased, it seems likely that these criteria play a greater role in shaping where tax credit developments are built.

  • Low-Income Housing Policy

    The United States government devotes about $40 billion each year to means-tested housing programs, plus another $6 billion or so in tax expenditures on the Low Income Housing Tax Credit (LIHTC). What exactly do we spend this money on, why, and what does it accomplish? The authors focus on these questions. They begin by reviewing the history of low-income housing programs in the U.S., and then summarize the characteristics of participants in means-tested housing programs and how programs have changed over time. The authors consider important conceptual issues surrounding the design of and rationale for means-tested housing programs in the U.S. and review existing empirical evidence, which is limited in important ways. Finally, we conclude with thoughts about the most pressing questions that might be addressed in future research in this area.

  • Give Credit Where Credit Is Due: Overhauling the CRA

    The Community Reinvestment Act (CRA) is in need of a major overhaul. Since the CRA was enacted in 1977, and since the last major rewrite of the regulations more than 15 years ago, much about the financial services industry has changed. This chapter discusses why the regulatory system needs to be redesigned to allow for more regular and timely updates, allowing more rapid  responses to what is working and what is not. By being more amenable to continuous improvement, the CRA should be more open to innovation and experimentation given the greater opportunity for making midterm corrections. This chapter starts with a brief overview of the CRA and its successes. It then outlines some ways to facilitate more regular updating of the CRA regulations, followed by a review of a number of ways to increase the effectiveness of CRA in helping to stabilize and revitalize low-and moderate-income (LMI) communities. 

  • Investigating the Relationship Between Housing Voucher Use and Crime

    This policy brief debunks the long-held myth that the influx of households with vouchers causes crime in a neighborhood to increase. Rather, the report finds that housing voucher recipients tend to move into neighborhoods with high existing levels of crime. These findings should reassure communities worried about entry of voucher holders, but also raise questions about whether the Housing Choice Voucher program is reaching its stated goal of helping recipients reach “better” neighborhoods.

  • Do Federally Assisted Households Have Access to High Performing Schools?

    This study describes the elementary schools closest to families receiving four different forms of housing assistance, and finds that families in Project-based Section 8 developments and Public Housing and recipients of Housing Choice Vouchers tend to live near schools with lower test scores than the schools near the typical poor household. Only families in Low Income Housing Tax Credit (LIHTC) housing have access to schools that are slightly better than the schools available to other poor families.  The report also finds that, despite the flexibility provided by vouchers, families with Housing Choice Vouchers, on average, live near lower performing schools than families in Project-based Section 8 or LIHTC developments. The report provides results for the 100 largest metropolitan areas, which show that assisted households tend to live near relatively higher performing schools in metropolitan areas with certain characteristics, including smaller size and less racial segregation. The analysis relies on a variety of different large data sources that have been brought together for the first time, including a national file of subsidized housing tenants from the Department of Housing and Urban Development (HUD), HUD’s publicly available LIHTC dataset, and data from the U.S. Department of Education on proficiency rates in math and English and additional school characteristics. In addition to the report below, the complete findings may be found in Appendix A (state-by-state tables), Appendix B (metropolitan area tables), Appendix C (national distributions of family units by school performance), and Appendix D (top 100 MSAs – percentile rankings for each housing program).

  • What Can We Learn about the Low Income Housing Tax Credit Program by Looking at the Tenants?

    Using tenant-level data from fifteen states that represent more than thirty percent of all Low Income Housing Tax Credit (LIHTC) units, this paper examines tenant incomes, rental assistance and rent burdens to shed light on key questions about our largest federal supply-side affordable housing program. Specifically, what are the incomes of the tenants, and does this program reach those with extremely low incomes? What rent burdens are experienced, and is economic diversity within developments achieved? We find that more than forty percent of tenants have extremely low incomes, and the overwhelming majority of such tenants also receive some form of rental assistance. Rent burdens are generally higher than for HUD housing programs, but vary greatly by income level and are lowered by the sizable share of owners who charge below maximum rents. Finally, we find evidence of both economically diverse developments and those with concentrations of households with extremely low incomes.

  • Subsidized Housing: A Cross-City Comparison

    The analysis from the 2011 State of New York City’s Housing and Neighborhoods report compares federally-subsidized housing programs across the nation’s five most populous cities: New York City, Los Angeles, Chicago, Houston, and Philadelphia. New York City has the largest share of subsidized rental housing of the five cities, due mostly to its large stock of public housing. Over five percent of the city’s housing units in 2008 (almost 180,000 units) were in public housing. In addition to subsidies, more than one million units—nearly half of the rental housing stock—are rent stabilized in New York City.

  • Household Energy Bills and Subsidized Housing

    Household energy consumption is crucial to national energy policy. This article analyzes how the rules covering utility costs in the four major federal housing assistance programs alter landlord and tenant incentives for energy efficiency investment and conservation. We conclude that, relative to market-rate housing, assistance programs provide less incentive to landlords and tenants for energy efficiency investment and conservation, and utilities are more likely to be included in the rent. Using data from the American Housing Survey, we examine the differences in utility billing arrangements between assisted and unassisted low-income renters and find that—even when controlling for observable building and tenant differences—the rent that assisted tenants pay is more likely to include utilities. Among all tenants who pay utility bills separately from rent, observable
    differences in energy expenses for assisted and unassisted tenants are driven by unit, building, and household characteristics rather than the receipt of government assistance.