IDEAS home Printed from https://ideas.repec.org/p/fip/fedkrw/rwp11-10.html
   My bibliography  Save this paper

Low-income housing tax credit developments and neighborhood property conditions

Author

Listed:
  • Kelly D. Edmiston

Abstract

Public housing has long been a contentious issue for cities and regions. While there is a great need for affordable housing in many communities, neighbors of low-income housing developments fret about neighborhood decay. This paper evaluates the notion that low-income housing developments damage the communities in which they are placed. The focus is on the evaluation of low-income housing tax credit (LIHTC) financed developments, and the neighborhood indicator of interest is the physical condition of nearby properties. The results of the empirical analysis suggest that proximity to LIHTC developments generally has a positive impact on neighborhood property conditions. However, extended analysis that separates LIHTC developments by type and size suggests that only small new construction developments and large rehab developments impact neighborhood property conditions. Further analysis reveals that when the model does not control for crime, the effect of proximity to LIHTC developments on property conditions is negative.

Suggested Citation

  • Kelly D. Edmiston, 2011. "Low-income housing tax credit developments and neighborhood property conditions," Research Working Paper RWP 11-10, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkrw:rwp11-10
    as

    Download full text from publisher

    File URL: https://www.kansascityfed.org/documents/7695/rwp11-10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joshua D. Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 69-85, Fall.
    2. Eriksen, Michael D. & Rosenthal, Stuart S., 2010. "Crowd out effects of place-based subsidized rental housing: New evidence from the LIHTC program," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 953-966, December.
    3. Jill Khadduri & Kathryn P. Nelson, 1992. "Targeting housing assistance," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(1), pages 21-41.
    4. repec:fth:prinin:455 is not listed on IDEAS
    5. Lyons, Robert F. & Loveridge, Scott, 1993. "An Hedonic Estimation Of The Effect Of Federally Subsidized Housing On Nearby Residential Property Values," Staff Papers 13377, University of Minnesota, Department of Applied Economics.
    6. Lance Freeman, 2003. "The impact of assisted housing developments on concentrated poverty," Housing Policy Debate, Taylor & Francis Journals, vol. 14(1-2), pages 103-141.
    7. Ingrid Gould Ellen & Amy Ellen Schwartz & Ioan Voicu & Michael H. Schill, 2007. "Does federally subsidized rental housing depress neighborhood property values?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(2), pages 257-280.
    8. Kirk McClure, 2006. "The low‐income housing tax credit program goes mainstream and moves to the suburbs," Housing Policy Debate, Taylor & Francis Journals, vol. 17(3), pages 419-446.
    9. 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.
    10. Haurin, Donald R. & Kamara, Duewa A., 1992. "The homeownership decision of female-headed households," Journal of Housing Economics, Elsevier, vol. 2(4), pages 293-309, December.
    11. Joshua Angrist & Alan Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Working Papers 834, Princeton University, Department of Economics, Industrial Relations Section..
    12. Schwartz, Amy Ellen & Ellen, Ingrid Gould & Voicu, Ioan & Schill, Michael H., 2006. "The external effects of place-based subsidized housing," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 679-707, November.
    13. Pagan, Adrian, 1984. "Econometric Issues in the Analysis of Regressions with Generated Regressors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 221-247, February.
    14. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    15. Anna M Santiago & George C Galster & Peter Tatian, 2001. "Assessing the property value impacts of the dispersed subsidy housing program in Denver," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(1), pages 65-88.
    16. Galster, George C., 1981. "A Neighborhood Interaction Model of Housing Maintenance and Quality Changes by Owner Occupants," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 11(2), pages 1-20.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kelly D. Edmiston, 2012. "Nonprofit housing investment and local area home values," Economic Review, Federal Reserve Bank of Kansas City, vol. 97(Q I), pages 67-96.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olsen, Edgar O. & Zabel, Jeffrey E., 2015. "US Housing Policy," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 887-986, Elsevier.
    2. Posada, Hector M. & García-Suaza, Andrés & Londoño, David, 2022. "The external effects of public housing developments on informal housing: The case of Medellín, Colombia," Working papers 98, Red Investigadores de Economía.
    3. Ayoung Woo & Kenneth Joh & Shannon Van Zandt, 2016. "Unpacking the impacts of the Low-Income Housing Tax Credit program on nearby property values," Urban Studies, Urban Studies Journal Limited, vol. 53(12), pages 2488-2510, September.
    4. Hyunsoo Kim & Youngwoo Kwon & Yeol Choi, 2020. "Assessing the Impact of Public Rental Housing on the Housing Prices in Proximity: Based on the Regional and Local Level of Price Prediction Models Using Long Short-Term Memory (LSTM)," Sustainability, MDPI, vol. 12(18), pages 1-25, September.
    5. Voith, Richard & Liu, Jing & Zielenbach, Sean & Jakabovics, Andrew & An, Brian & Rodnyansky, Seva & Orlando, Anthony W. & Bostic, Raphael W., 2022. "Effects of concentrated LIHTC development on surrounding house prices," Journal of Housing Economics, Elsevier, vol. 56(C).
    6. Di, Wenhua & Murdoch, James C., 2013. "The impact of the low income housing tax credit program on local schools," Journal of Housing Economics, Elsevier, vol. 22(4), pages 308-320.
    7. Kelly D. Edmiston, 2012. "Nonprofit housing investment and local area home values," Economic Review, Federal Reserve Bank of Kansas City, vol. 97(Q I), pages 67-96.
    8. Youngme Seo & Michael Craw, 2017. "Is something better than nothing? The impact of foreclosed and lease-purchase properties on residential property values," Urban Studies, Urban Studies Journal Limited, vol. 54(16), pages 3681-3699, December.
    9. Lang, Bree J., 2015. "Input distortions in the Low-Income Housing Tax Credit: Evidence from building size," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 119-128.
    10. Benoît Schmutz, 2012. "Public Housing Quotas and Segregation," AMSE Working Papers 1228, Aix-Marseille School of Economics, France.
    11. Quincy, Sarah, 2022. "Income shocks and housing spillovers: Evidence from the World War I Veterans’ Bonus," Journal of Urban Economics, Elsevier, vol. 132(C).
    12. Gabriel M. Ahlfeldt & Nancy Holman, 2018. "Distinctively Different: A New Approach to Valuing Architectural Amenities," Economic Journal, Royal Economic Society, vol. 128(608), pages 1-33, February.
    13. Goeyvaerts, Geert, 2023. "Reconstructing cities: Stimulating redevelopment through the tax code," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    14. Schuetz, Jenny & Spader, Jonathan & Cortes, Alvaro, 2016. "Have distressed neighborhoods recovered? Evidence from the neighborhood stabilization program," Journal of Housing Economics, Elsevier, vol. 34(C), pages 30-48.
    15. Ismail, Mohammad & Wilhelmsson, Mats, 2022. "New housing investments' effects on gentrification and affordability in Stockholm, Sweden," Working Paper Series 22/8, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    16. Brian Asquith & Evan Mast & Davin Reed, 2019. "Supply Shock Versus Demand Shock: The Local Effects of New Housing in Low-Income Areas," Upjohn Working Papers 19-316, W.E. Upjohn Institute for Employment Research.
    17. Felipe Berrutti, 2016. "Subsidios a la oferta y decisiones de localización: El caso de la Ley de Vivienda de Interés Social," Documentos de Investigación Estudiantil (students working papers) 16-02, Instituto de Economía - IECON.
    18. Freedman, Matthew & Owens, Emily G., 2011. "Low-income housing development and crime," Journal of Urban Economics, Elsevier, vol. 70(2), pages 115-131.
    19. Ellen, Ingrid G. & Horn, Keren M. & O'Regan, Katherine M., 2016. "Poverty concentration and the Low Income Housing Tax Credit: Effects of siting and tenant composition," Journal of Housing Economics, Elsevier, vol. 34(C), pages 49-59.
    20. Sungho Park & Sachin Gupta, 2012. "Handling Endogenous Regressors by Joint Estimation Using Copulas," Marketing Science, INFORMS, vol. 31(4), pages 567-586, July.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedkrw:rwp11-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Zach Kastens (email available below). General contact details of provider: https://edirc.repec.org/data/frbkcus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.