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Low-income-rental-housing programs in the Fourth District

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  • Matthew Klesta
  • Frank Manzo
  • Francisca Richter
  • Mark S. Sniderman

Abstract

In the aftermath of the Great Recession, many policy analysts are rethinking national housing policies, including affordable housing programs. We review the literature to compare the largest tenant-based (housing choice voucher or HCV) and place-based (low-income-housing tax credit or LIHTC) programs with respect to cost efficiency and access to better quality neighborhoods. We also provide an overview of low-income-rental-housing policy trends and perform a rough comparison of neighborhood quality across programs and counties, focusing on four main urban counties in the Fourth Federal Reserve District (Cuyahoga, Hamilton, and Franklin in Ohio, and Allegheny in Pennsylvania). We find that in spite of relatively stable real rents, affordability in the Ohio counties declined between 2005 and 2009 due to a drop in real incomes. We find that in Allegheny County during 2006-2009, neighborhood quality was comparable for rental units available through each of the two housing programs. We also find evidence that neighborhoods with LIHTC investments placed in service by 2000 in Allegheny County improved their quality by 2006-2009 relative to comparable neighborhoods, but we do not find similar evidence for the Ohio counties. Lacking tenant-level data on LIHTC renters, it is hard to explain these regional differences. Finally, we note that richer data reporting on various aspects of HCV and LIHTC would improve the ability of program administrators and policymakers to design, coordinate, and evaluate programs based on efficiency and effectiveness.

Suggested Citation

  • Matthew Klesta & Frank Manzo & Francisca Richter & Mark S. Sniderman, 2013. "Low-income-rental-housing programs in the Fourth District," Working Paper 1311, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwp:1311
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    References listed on IDEAS

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    1. Dionissi Aliprantis, 2011. "Assessing the evidence on neighborhood effects from moving to opportunity," Working Paper 1101, Federal Reserve Bank of Cleveland.
    2. Freedman, Matthew & Owens, Emily G., 2011. "Low-income housing development and crime," Journal of Urban Economics, Elsevier, pages 115-131.
    3. Baum-Snow, Nathaniel & Marion, Justin, 2009. "The effects of low income housing tax credit developments on neighborhoods," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 654-666, June.
    4. Malpezzi, Stephen & Vandell, Kerry, 2002. "Does the low-income housing tax credit increase the supply of housing?," Journal of Housing Economics, Elsevier, vol. 11(4), pages 360-380, December.
    5. Gregory S. Burge, 2011. "Do Tenants Capture the Benefits from the LowÔÇÉIncome Housing Tax Credit Program?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 39(1), pages 71-96, March.
    6. Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2015. "When Spatial Equilibrium Fails: Is Place-Based Policy Second Best?," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1303-1325, August.
    7. Sinai, Todd & Waldfogel, Joel, 2005. "Do low-income housing subsidies increase the occupied housing stock?," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2137-2164, December.
    8. Eriksen, Michael D., 2009. "The market price of Low-Income Housing Tax Credits," Journal of Urban Economics, Elsevier, vol. 66(2), pages 141-149, September.
    9. Edgar O. Olsen, 2000. "The Cost-Effectiveness of Alternative Methods of Delivering Housing Subsidies," Virginia Economics Online Papers 351, University of Virginia, Department of Economics.
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