The Effects of Concentrated LIHTC Development on Surrounding House Prices

22 Pages Posted: 8 Feb 2021

See all articles by Richard Voith

Richard Voith

Econsult Solutions

Jing Liu

Econsult Solutions

Sean Zielenbach

SZ Consulting

Andrew Jakabovics

Enterprise Community Partners

Brian An

Georgia Institute of Technology

Seva Rodnyansky

Occidental College

Anthony W. Orlando

California State Polytechnic University, Pomona - Finance, Real Estate and Law Department

Raphael W. Bostic

Federal Reserve Bank of Atlanta

Date Written: July 8, 2020

Abstract

The Low-Income Housing Tax Credit is the largest supply-side housing subsidy in the United States, costing over $8 billion per year. LIHTC properties tend to be concentrated in low-income urban communities. Numerous studies have examined the spillover effects of these properties but have not accounted for their clustering or teased out the effects of introducing additional LIHTC developments to neighborhoods. We combine an interrupted time series model with a difference-in-difference approach to estimate the additive property value effects in Chicago and surrounding Cook County, Illinois. The development of subsequent LIHTC properties within a neighborhood augments the positive effects of the initial property as far as half a mile away, in both low-income and higher-income areas. The effects are most pronounced in neighborhoods with low median incomes.

Keywords: LIHTC, affordable housing, housing prices, spatial persistence, neighborhood change

JEL Classification: R31, R38, R21, H23, H42, G12

Suggested Citation

Voith, Richard and Liu, Jing and Zielenbach, Sean and Jakabovics, Andrew and An, Brian and Rodnyansky, Seva and Orlando, Anthony W. and Bostic, Raphael W., The Effects of Concentrated LIHTC Development on Surrounding House Prices (July 8, 2020). Available at SSRN: https://ssrn.com/abstract=3740758 or http://dx.doi.org/10.2139/ssrn.3740758

Richard Voith

Econsult Solutions ( email )

Jing Liu

Econsult Solutions ( email )

Sean Zielenbach

SZ Consulting ( email )

Andrew Jakabovics

Enterprise Community Partners ( email )

United States

Brian An

Georgia Institute of Technology ( email )

685 Cherry St
Atlanta, GA 30332
United States

HOME PAGE: http://www.brian-y-an.com

Seva Rodnyansky

Occidental College ( email )

1882 Campus Road
90041, CA
United States

HOME PAGE: http://https://www.oxy.edu/academics/faculty/seva-rodnyansky

Anthony W. Orlando (Contact Author)

California State Polytechnic University, Pomona - Finance, Real Estate and Law Department ( email )

United States

Raphael W. Bostic

Federal Reserve Bank of Atlanta

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

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