The low income housing tax credit and racial segregation

Keren M. Horn, Katherine M. O'Regan

Research output: Contribution to journalArticlepeer-review

Abstract

This paper addresses a critical but almost unexamined aspect of the Low Income Housing Tax Credit (LIHTC) program - whether its use (and in particular, the siting of developments in high-poverty/high-minority neighborhoods), is associated with increased racial segregation in the metropolitan area. Using data from the Department of Housing and Urban Development (HUD) and the Census, supplemented with data on the racial composition of LIHTC tenants in three states, we examine three potential channels through which the LIHTC could affect segregation: where LIHTC units are built relative to where other low income households live, who lives in these tax credit developments, and changes in neighborhood racial composition in neighborhoods that receive tax credit projects. The evidence on each of these channels suggests that LIHTC projects do not contribute to increased segregation, even those in high poverty neighborhoods. We find that increases in the use of tax credits are associated with declines in racial segregation at the metropolitan level.

Original languageEnglish (US)
Pages (from-to)443-473
Number of pages31
JournalHousing Policy Debate
Volume21
Issue number3
DOIs
StatePublished - Jun 2011

Keywords

  • Low-income housing
  • Minorities
  • Neighborhood
  • Nonprofit sector
  • Tax credit

ASJC Scopus subject areas

  • Development
  • Urban Studies
  • Management, Monitoring, Policy and Law

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