Recent Study Examines Location of LIHTC Properties and Effect on Segregation
The Fair Housing Justice Center (FHJC) recently released a report entitled “Choice Constrained, Segregation Maintained: Using Federal Tax Credits to Provide Affordable Housing” that examines the location of affordable housing/Low-Income Housing Tax Credit (LIHTC) properties in the New York City region and how housing location can perpetuate segregation.
The report concludes that the location of affordable housing can determine whether families have access to a variety of areas, including low-poverty communities that may offer greater employment opportunities, high-quality educational opportunities, and other important amenities. Some of the key findings contained in the report include:
- Most LIHTC affordable housing units (71 percent) were located in areas of high or extreme poverty;
- Most LIHTC affordable housing units (77 percent) were located in minority neighborhoods;
- Nearly half of all LIHTC housing units in suburban areas were elderly units. Sixty-three percent of the elderly units were located in low-poverty areas, while only 25 percent of the family units were located in these areas. Similarly, 74 percent of the suburban elderly units were developed in white or predominantly white areas, while only 31 percent of family units were located in these areas;
- LIHTC housing units were concentrated in poor and minority neighborhoods regardless of whether they involved the rehabilitation or new construction of multifamily housing; and
- More than half of the LIHTC housing units developed in the study area received tax credits from New York City’s Department of Housing Preservation and Development, the largest municipal developer of affordable housing in the nation. Only 2 percent of these units were located in low-poverty neighborhoods and only 9 percent were located in white or predominantly white areas in New York City.
The report includes recommended action steps for the IRS and New York’s housing agencies aimed at ensuring that the LIHTC program operates in a manner that:
- Complies with the federal Fair Housing Act and the duty to affirmatively further fair housing;
- Expands housing choices available to lower-income and minority family households;
- Deconcentrates poverty and reduces residential racial segregation;
- Proactively identifies and eliminates barriers to developing tax credit housing for families in low-poverty areas; and
- Provides incentives to promote the development of mixed-income housing that includes both affordable and market-rate units.