Using New Data Sources to Study Neighborhood Outcomes for LIHTC Tenants

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

Abstract

The Low-Income Housing Tax Credit (LIHTC) programs annually serves over two million households. In addition to providing lower-cost housing, LIHTC units could provide lower-income households with a foothold in higher-opportunity neighborhoods. There is little evidence that this has been the case, but relevant studies are based on where these units are sited, without much knowledge about where the residents came from. 

This paper uses the University of California Consumer Credit Panel (UC-CCP) to identify the neighborhoods that households move from when they enter LIHTC housing and the neighborhoods they move to when they move out of LIHTC units. To identify LIHTC residence, we link the UC-CCP to project-level data from the California Housing Partnership (CHP) database. These data include property information on each LIHTC development, including the date that the certificate of occupancy was issued. We also incorporate property-level racial and ethnic demographic data on residents of LIHTC developments, obtained from a state housing agency, and data on neighborhood characteristics obtained from the U.S. Census and American Community Survey. The strength of the UC-CCP data is in its credit score profiles, so we focus on four potential credit bands for each household: Subprime, Near Prime, Prime, and Super Prime. 

Using these data, we begin by identifying each move as integrative, segregative, or neutral. We define these moves in two ways. First, we only use information on the destination neighborhood’s credit-based entropy index (a measure of localized segregation) and the credit band. If a move by that household into a neighborhood entrenches segregation, it is segregative. If it would integrate the neighborhood, it is integrative. And if it has little or no effect (i.e. the household’s credit profile is overrepresented in the neighborhood), then it is classified as neutral. Our second definition uses the credit profile of the origin and destination neighborhood and considers moves to be integrative, segregative or neutral based on the net effect of the move. For example, if a super prime household leaves a subprime neighborhood and moves into a super prime neighborhood, that is a segregative move. If they instead move into another subprime neighborhood, that is likely a neutral move. 

After describing the broader trends and correlates of segregative and integrative moves, we answer a series of questions specific to the LIHTC program. First, when households move into LIHTC units, are they more or less likely to make integrative or segregative moves? Then, how does neighborhood quality change? We also examine whether building new subsidized housing is associated with higher or lower rates of residential mobility (i.e. people moving more frequently into or out of the neighborhood where the housing was built). Finally, we analyze whether living in LIHTC is a springboard to higher opportunity neighborhoods on their next move, or whether they move to lower quality neighborhoods, perhaps because their housing is no longer subsidized. 

Authors

• Michael C Lens, University of California - Los Angeles
  Presenting Author

• Katherine L Chen, University of California - Los Angeles
  Non-Presenting Co-Author

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

• Paavo Monkkonen, University of California - Los Angeles
  Non-Presenting Co-Author

• Dan Rinzler, California Housing Partnership
  Non-Presenting Co-Author