Do localized housing programs lead to racial equity? Evidence from the State Housing Initiatives Partnership program

Housing credit inflows are a substantial contributor to the economic opportunities and vitality of a community. However, these opportunities have not been dispersed equitably across diverse subpopulations and neighborhoods. Although various public and private initiatives have been launched to address inequitable access to mortgage capital, the role of localized and decentralized housing programs in achieving racially equitable outcomes remains understudied. As a case study, this study examines whether a decentralized and localized housing policy without explicit regulations for resource distribution across racial and ethnic groups promotes racial and neighborhood equity, focusing on its role in serving racial minority households and neighborhoods underserved by private mortgage markets. By incorporating various statistical methods, this study provides evidence that controlling for other factors, the program disproportionately supports racial minority households and neighborhoods that are underserved by private mortgage capital, although this positive role can vary across localities.