Residential Moves and Proximity to LIHTC Developments

Residential Moves and Proximity to LIHTC Developments
Ayoung Woo, Kenneth Joh, Shannon Van Zandt
Urban Affairs Review
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How do Low-Income Housing Tax Credit (LIHTC) developments affect residential stability, or the movement of people into and out of neighborhoods? Ayoung Woo and his colleagues examine this question by analyzing the probability of housing turnover at the parcel level in Charlotte, North Carolina, a “hot” housing market in the South, and Cleveland, Ohio, a “cold” housing market in the Midwest. This analysis differs from previous literature that examines the effects of LIHTC subsidized housing on residential stability in Northeastern cities and by larger geographic units of analysis. Using local data on housing duration, the time between home sales, and sale prices, the authors determine the likelihood that LIHTC developments affect nearby residential stability. The researchers examine housing duration before and after the construction of LIHTC-subsidized housing in microneighborhoods, as defined by the distance from LIHTC developments: immediate neighborhoods (up to 500 feet away) and functional neighborhoods (500 to 2,000 feet away). Additionally, the authors examine the probability of LIHTC affecting different submarkets, microneighborhoods at different family income levels. The study aims to inform policymakers about how LIHTC-subsidized housing can affect neighborhoods and enhance residential stability, because of its positive role in promoting social integration.

Key findings

  • The authors used extended Cox hazard models with the dependent variable as days between home sales to show that LIHTC developments increased the probability of housing turnover in microneighborhoods in Cleveland and Charlotte.
  • High-income neighborhoods in Charlotte were most likely to see turnover because of the construction of LIHTC developments, and proximity to the LIHTC units increased this impact.
  • The likelihood that LIHTC developments affect housing turnover varies across submarkets. For instance, middle-income submarkets in both cities experienced significant housing turnover in immediate and functional neighborhoods, but low-income Charlotte submarkets only saw increased turnover in functional neighborhoods after LITHC construction.