Is Affordable Housing Being Built in High-Opportunity Neighborhoods?
Neighborhoods – and their schools and associated poverty, or lack of it – can have a significant influence on the well-being of children. Therefore, concentrating the construction of affordable housing in neighborhoods with high-poverty and poor schools limits the opportunities for children living in such housing.
A key incentive for building affordable housing across the U.S. is the Low-Income Housing Tax Credit (LIHTC) program. LITHC offers federal tax rebates for financing the construction and rehabilitation of low-income, affordable rental housing. Without this subsidy, private developers and investors would not be able to make enough profit on these projects to justify the investment. In return, the developers agree to offer rental units at affordable rates for 30 years.
But are these affordable housing projects being built in neighborhoods that provide families with opportunities to improve their lives?
The Legal Aid Society of Southwest Ohio, on behalf of a group of Ohio legal aid programs, asked Abt Associates to analyze the locations of 509 LIHTC properties – with a total of 34,255 units – supported by the Ohio Housing Finance Agency (OHFA) between 2006 and 2015. Approximately half of those – 243 properties and 17,089 units – can be occupied by families with children.
In a report released in August, Abt housing researchers found that OHFA awarded credits to support affordable housing in metropolitan areas almost entirely outside of high opportunity neighborhoods, defined partly as those with a poverty rate of less than 10 percent. Specifically, the LITHC awards in Ohio went to just nine properties with 526 units – just 3.8 percent of all OHFA-supported units during that time – in high opportunity, low poverty neighborhoods.
In contrast, between 2006 and 2015, OHFA made more than 45 percent of all awards of family housing in metropolitan areas — more than 6,000 units — in neighborhoods with extreme poverty concentrations, defined as having a poverty rate of more than 40 percent. Such neighborhoods are considered highly distressed.
Read the full report by Abt Associates.
Read more about Abt's work in housing.