Report Finds Room for Improvement in Promoting Access to Opportunity for Bay Area Developments

The Haas Institute for a Fair and Inclusive Society at UC Berkeley recently released a study that comprehensively analyzes the administration of the LIHTC program in California by examining LIHTC developments in the San Francisco Bay Area.

The analysis revealed that nearly two-thirds of LIHTC projects (64.9 percent) in the nine-county area were sited in Moderate, Low, and Very Low Opportunity neighborhoods during the years for which data was available (1987-2014). Nine percent tax credits, which real estate developers apply for on a competitive basis, were more frequently used to create housing in high opportunity neighborhoods than 4 percent tax credits, which do not have a competitive application process and which are of lesser value to developers.

However, the findings indicate that 9 percent LIHTC projects are sited in neighborhoods that are not racially integrated; on a 3.78 to 1 basis, 9 percent projects were sited in neighborhoods where 50 percent or more of the population were people of color. Additionally, almost half of all large family housing projects, in which 25 percent of units have three or more bedrooms, were sited in low and very low opportunity areas. According to the report, this finding is particularly concerning because large family projects tend to house families with children, who are particularly sensitive to their neighborhood’s conditions.

The measurement of “opportunity” was assessed with the UC Davis Regional Opportunity Index (ROI) to map resources, services, and hazards in each census tract. This methodology involves using federal and state databases to calculate scores for five domains of opportunity: Education, Economy, Housing, Health/Environment, and Civic Life. The indicators, calculated using data from 2014, range from the percent of ninth-graders who graduate in four years to the levels of pollutants in the air; taken together, these indicators serve as an approximation of the conditions and realities that people in different neighborhoods experience. 

This report was the Haas Institute’s first publication on the LIHTC program in California and its second analysis of the LIHTC’s outcomes. In 2014, the Institute provided an analysis of Dallas, Texas, LIHTC projects that was featured in an amicus brief for the Supreme Court in Texas Department of Community Affairs v. Inclusive Communities Project.