Affordable housing, families and neighborhoods

A  study on the effects of two New York Low-Income Housing Tax Credit (LIHTC) projects  supports what housing advocates have known for some time - affordable rents free up income for other household expenses like food, health insurance and child care. Yet, the benefits of tax credit properties extend beyond the alleviation of housing cost burden by raising property values and contributing to the vitality of local retailers. 

The New York offices of Enterprise Community Partners and LISC, examined two LIHTC circa 2000 housing developments in the Bronx. Most residents were employed, earning an average of one-third the area median income. The projects' tenants paid rent that was one-third lower than market-rate rents in the neighborhood. Findings from this research include:

• Families paying affordable rents averaging $290 per month less than market rates increased their discretionary income by 77%, putting them in a position to pay for other household expenses or put away money in savings.
• A cluster of developments in a commercial area boosted estimated local purchasing power by about 5%, contributing to the retail vitality of the neighborhood and the availability of goods and services.
• The two projects produced a significant increase in property values.
• Despite affordable rents and high quality housing, residents were not always satisfied with all aspects of their living situation. A small group of residents taking part in a group interview spoke of dissatisfaction with the behavior of other residents and crime problems in the neighborhood.

This study suggests that though affordable housing development alone does not solve all problems, it can alleviate much of the financial stress for low-income families (and likely increases housing stability) and increase neighborhood quality.

For more information and research about the LIHTC visit Novogradac & Company's About the LIHTC and the LIHTC Research Center.