Shifting Neighborhoods of Opportunity: LIHTC and School and Neighborhood Change Over Time

• In Event: New Perspectives on People and Places in the Low-Income Housing Tax Credit Program

Abstract

The Low-Income Housing Tax Credit (LIHTC) program is the primary affordable housing production program in the U.S.  Research has shown that although LIHTC properties tend to be located in higher resourced neighborhoods than other project-based subsidized housing (e.g., public housing), they still compare negatively to the neighborhoods of all renters and non-subsidized low-income renters. In recent years, states have begun using their Qualified Allocation Plans to incentivize new LIHTC projects in higher opportunity neighborhoods, often using an index of various measures designed to capture the types of neighborhoods that have been shown to improve outcomes for children.

However, both research and these “opportunity maps” typically take static snapshots of neighborhood conditions at a single point in time and do not track neighborhood change over time. LIHTC may provide access to opportunity if it allows low-income households to stay in gentrifying neighborhoods. In contrast, if LIHTC is located in rapidly declining neighborhoods, it may be compounding neighborhood segregation patterns. Little is known about how much neighborhoods change around LIHTC properties. Moreover, we know even less about how the local schools serving LIHTC properties have changed over time. Policy debates around the importance of providing access to neighborhood opportunity for low-income families often focus on the importance of neighborhoods for children, and schools are one neighborhood amenity through which upward mobility can occur. 

In this paper, we examine the changing local contexts of LIHTC properties placed in service in California between 1990 and 2010, drawing on property address and placed-in-service data from the California Tax Credit Allocation Committee (TCAC). We draw on Census and American Community Survey data from 1990 to 2023 to estimate change in the conditions in LIHTC properties’ neighborhoods. We define LIHTC properties’ neighborhoods as the aggregate socioeconomic and demographic composition of all block groups fully or partially within a one-mile radius. We define LIHTC properties’ local school contexts as the average socioeconomic and demographic conditions in the three closest elementary schools within a three-mile radius.

We describe how neighborhood and school context changed around LIHTC properties from 1990 to 2023 after the properties were placed in service. We attend to variation in local contexts’ trajectories by geographic regions within California, stronger and weaker rental markets, and LIHTC project type (e.g., family, seniors). Preliminary findings demonstrate considerable change over time. For example, 64.3% of LIHTC properties in CA changed poverty rate categories (0-10%, 10-20%, 20-30%, 30-40%, 40%+) over time, with 9.5 percent shifting from being a low- to high-poverty tract and 14.4% shifting from being a high-poverty to low-poverty tract. Our results demonstrate that analyses of the location of LIHTC properties must take a dynamic approach to fully evaluate whether and how affordable housing policy is improving access to neighborhood opportunity for low-income families.

Authors

• Ann Owens, University of California - Los Angeles
  Presenting Author

• Carolina K Reid, University of California, Berkeley
  Non-Presenting Co-Author

• Quinn Underriner, Terner Center for Housing Innovation, UC Berkeley
  Non-Presenting Co-Author