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Title: Do Increases in Subsidized Housing Reduce the Incidence of Homelessness? Evidence from the Low-Income Housing Tax Credit

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: In this paper, we test whether the Low-Income Housing Tax Credit (LIHTC), the largest and fastest growing federal program for subsidized, low-income housing, a ffects the incidence of homelessness in the U.S. If rates of homelessness are driven at least in part by shortages of low-cost housing, and if LIHTC positively influences the supply of such housing, we would expect a negative relationship between LIHTC and homelessness prevalence in local markets. As a source of identifying variation, we exploit a discontinuous increase in the amount of tax credits that are available to projects placed in certain high-poverty census tracts. The differential benefi t of LIHTC development within such "qualified census tracts" generates a plausibly exogenous allocation of LIHTC projects across otherwise similar neighborhoods. Using counts of the home-less population from the 2000 U.S. Census complemented with information on LIHTC projects placed in service from the Department of Housing and Urban Development, we estimate the relationship between LIHTC projects and homelessness incidence. We find that LIHTC project installation has no significant impact on local area rates of homelessness. This result persists when accounting for the potential mobility of the homeless population across census tracts, as well as possible measurement error in homelessness counts. LIHTC development does appear, however, to significantly improve the housing quality of the housed population.

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Authors: Kawano, Laura; Jackson, Osborne

Publisher: University of Michigan

Data Collections: IPUMS USA, IPUMS NHGIS

Topics: Housing and Segregation

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