The What, Where, and When of Place-Based Housing Policy's Neighborhood Effects

Researchers conclude that policymakers should continue to enlist LIHTC towards the dual goals of promoting opportunity through production in low-poverty neighborhoods and the revitalization of distressed areas. Evidence further provides developers and advocates material for responding to NIMBY concerns in high opportunity neighborhoods.

A new analysis published in Housing Policy Debate reviews recent high-quality research on the neighborhood effects of Low-Income Housing Tax Credit (LIHTC) production in distressed communities as well as in high-opportunity neighborhoods. The authors find that producing LIHTC housing in distressed neighborhoods positively impacts the surrounding area - in terms of modest property value gains and increased safety. By contrast, higher opportunity neighborhoods may experience small, short-term property value reductions, but the authors found no impacts on crime rates. Big questions remain, however, about impact heterogeneity—via tenant mix, property design, and ongoing property management, as examples—with the scarcity of systematic data representing one of the field’s largest constraints.