What Can We Learn About the Low-Income Housing Tax Credit Program by Looking at the Tenants?

Abstract

Several recent studies have found that homeownership has positive effects on children's development. This article extends these studies by testing whether these effects depend on neighborhood conditions. This extension is important because many low‐income families that become homeowners under current policies promoting homeownership for the poor are likely to purchase homes in troubled or distressed neighborhoods.

Homeownership in almost any neighborhood is found to benefit children, while neighborhood effects are weak. This suggests that the children of most low‐income renters would be better served by programs that help their families become homeowners in their current neighborhoods instead of helping them move to better neighborhoods while remaining renters. However, the positive effects of homeownership on children are weakened in distressed neighborhoods, especially those that are residentially unstable and poor. Thus, helping low‐income families purchase homes in good neighborhoods is likely to have the best effects on children.     

Do Neighborhood Effects on Low-Income Minority Children Depend on Their Age? Evidence From a Public Housing Natural Experiment

We analyze data from a natural experiment involving Denver public housing that quasirandomly assigns low-income Latino and African American youth to neighborhoods. Intent-to-treat and treatment-on-treated models reveal substantial effects of neighborhood socioeconomic status, ethnicity, and safety domains on youth and young adult educational, employment, and fertility outcomes. Effects are contingent on when a youth was first assigned to public housing and the neighborhood characteristic in question. Benefits from neighbors of higher occupational prestige are stronger if a child begins experiencing them at a younger age, whereas negative consequences of neighborhood crime are only manifested for teens. Neighborhood effect sizes apparently depend on the interaction among exposure duration, disruption effects of mobility, and developmental stage-specific differences in vulnerability to the given neighborhood effect mechanism operative. Our results hold powerful and provocative implications for where assisted housing should be developed and how applicants should be assigned to neighborhoods.     

Why Do Housing Mobility Programs Fail in Moving Households to Better Neighborhoods?

This article conceptualizes the relationship between housing instability, residential mobility, and neighborhood quality. We summarize the existing literature about residential mobility and housing instability and examine their potential interactions along three dimensions: (a) the reasons for a move, including a variety of push and pull factors; (b) mobility outcomes in terms of whether moves result in residing in a better or worse neighborhood than that of the prior residence; and, especially important for low-income households, (c) the degree to which the current move and past experiences of moving have been discretionary or forced. Housing instability is a cumulative concept, with involuntary moves at its center. This synthetic model of housing instability's impact on mobility outcomes suggests that the more instability a household has experienced, the less likely mobility moves are to occur, or, if they do occur, to be long lasting. Policy implementation may underestimate the interaction between cumulative housing instability and residential mobility in housing mobility policies. Thus, these interactions have implications for mobility policies, pointing toward a path for future research that inform policies to move low-income households toward both greater housing stability and better neighborhood outcomes.     

Points for Place: Can State Governments Shape Siting Patterns of Low-Income Housing Tax Credit Developments?

There is considerable controversy about the allocation of Low-Income Housing Tax Credits (LIHTC). Some charge that credits are disproportionately allocated to developments in poor, minority neighborhoods without additional investments and thereby reinforcing patterns of poverty concentration and racial segregation. We examine whether Qualified Allocation Plans, which outline the selection criteria states use when awarding credits, can serve as an effective tool for directing credits to higher opportunity neighborhoods (or neighborhoods that offer a rich set of resources, such as high-performing schools and access to jobs) for states wishing to do so. To answer this question, we study changes in the location criteria outlined in allocation plans for 20 different states across the country between 2002 and 2010, and observe the degree to which those modifications are associated with changes in the poverty rates and racial composition of the neighborhoods where developments awarded tax credits are located. We find evidence that changes to allocation plans that prioritize higher opportunity neighborhoods are associated with increases in the share of credits allocated to housing units in lower poverty neighborhoods and reductions in the share allocated to those in predominantly minority neighborhoods. This analysis provides the first source of empirical evidence that state allocation plans can shape LIHTC siting patterns.     

Gateway to Opportunity? Disparities in Neighborhood Conditions Among Low-Income Housing Tax Credit Residents

A key goal of housing assistance programs is to help lower income households reach neighborhoods of opportunity. Studies have described the degree to which Low-Income Housing Tax Credit (LIHTC) developments are located in high-opportunity neighborhoods, but our focus is on how neighborhood outcomes vary across different subsets of LIHTC residents. We also examine whether LIHTC households are better able to reach certain types of neighborhood opportunities. Specifically, we use new data on LIHTC tenants in 12 states along with eight measures of neighborhood opportunity. We find that compared with other rental units, LIHTC units are located in neighborhoods with higher poverty rates, weaker labor markets, more polluted environments, and lower performing schools, but better transit access. We also find that compared with other LIHTC tenants, poor and minority tenants live in neighborhoods that are significantly more disadvantaged.     

Does Homeownership Protect Individuals From Economic Hardship During Housing Busts?

ABSTRACT

Does homeownership protect individuals from experiencing economic hardships even during housing busts? Does the relationship differ by race and ethnicity? Using the Survey of Income and Program Participation 2008 panel in the United States and controlling for income and various family characteristics, we find that the likelihood of experiencing any hardship is 5.6 percentage points lower for homeowners than for renters without rent subsidies, a reduction of about 25%. Owning a home for more than 10 years provides more protection than owning a home for less than 4 years. Homeownership’s role in shielding people from economic hardship is significant not only for non-Hispanic whites, but also for non-Hispanic blacks and Hispanics. The negative relationship of homeownership to economic hardship offers additional evidence that it is beneficial to own your home, even during housing busts and even for households of color.     

Putting the Economy First: or Does Postmodernization Really Matter?

In recent years, there has been a strong tendency for the politicians of Western nations to make issues of economic policy making their first priority. Emerging evidence from the economics discipline, which shows a close association between subjective well-being and other macroeconomic variables such as unemployment and inflation, suggests that this priority ordering of politicians may well be one which is functional from an electoral viewpoint. However, recent research by Ronald Inglehart on the development of 'postmaterialist' values challenges the continuing electoral relevance of an economics-first approach to policy making by suggesting that, in advanced societies, mass publics are exercised more by quality of life concerns than by issues of economic affluence. Here we use Eurobarometer data for 12 EU nations to explore the nature of the linkage between economic policy outcomes and levels of popular satisfaction in both economically advanced and less advanced societies. Our findings suggest that affluence is not the only economic determinant of subjective well-being in these countries and that, contrary to Inglehart's thesis, the growth of the economy impacts on subjective well-being in rich and poor nations alike.     

Strauss and 'Straussianism': From the Ancients to the Moderns?

Do scholars inspired by Leo Strauss adhere to, or diverge from, his teachings as they contribute to turn of the twenty-first-century American conservative thought and new conceptions of the American political executive and constitutional order? Analyzing Strauss' view of the twofold task of political philosophy, as well as his position that modern political philosophy inexorably leads to philosophic and moral crises, the scaffolding of Strauss' political outlook – and the dimensions of its contemporary relevance – will begin to take shape. Turning to the writings on America by many of Strauss' most notable students, we discover that most of them point back to the admittedly liberal theories of John Locke and the American founders as the starting point for defining a new conservative outlook that will address the problems of modernity. We are thus confronted by a quandary. How can an important current of Strauss-inspired scholarship put forth that the theories of Locke and the American founders provide the foundation for addressing a crisis that Strauss states is rooted in that very modernity? We will discover that the thought of Strauss and an important strand of Straussianism are not the same, because Strauss-inspired scholarship on America adheres to only a facet of Strauss' two-pronged political philosophy. Strauss, however, cannot disavow responsibility for these students and followers, who embrace an important current of his thinking.     

From Command Economy to Hollow State? Decentralisation in Vietnam and China

In Vietnam and China, decentralisation is a by‐product, both by default and design, of the transition to a state‐managed market economy. A dual process of horizontal and vertical decentralisation is occurring simultaneously in both the economic and political arena. There is an increasingly high level of de facto political/fiscal decentralisation, much of it occurring by default as local governing units try to meet rising demand for services. This is accompanied by the marketisation and socialisation of services such as education and health. Accompanying both of these processes is a trend towards greater ‘autonomisation’ of service delivery units, including the emergence of new ‘para‐state’ entities. Most of these decentralisation processes are the by‐product of marketisation, rather than part of a process of deliberate state restructuring in pursuit of ideals of decentralised government. The cumulative effects include a significant fragmentation of the state, a high potential for informalisation and corruption, and a growing set of performance accountability problems in the delivery of public services.     

Building for the Future: Where Should We Build Houses to Stimulate the Economy?

The UK's housing problem has become an economic one. Finding ways to boost the supply of housing across the UK is currently near the top of the Government's economic growth and jobs agenda. As a result of failed policies over the past 60 years ‐ policymakers’ unwillingness to tackle NIMBY interests, a complex national planning system, developers’ unwillingness and inability to build housing at the volume required to maintain stable prices, changing preferences amongst the population ‐ the scale of the problem is vast. However, for any hope of success for the Government's housing strategy, it is vital to understand the extent to which the housing landscape varies significantly across different parts of the country.     

Transforming Scotland's Public-sector Housing through Community Ownership: The Reterritorialisation of Housing Governance?

In recent decades, UK public-sector housing has increasingly been problematised, with government solutions focusing on modernising the sector by transferring ownership of the housing from the public to the voluntary sector through stock transfer. This promises to transform the organisation of social housing by devolving control from local government to housing organisations located within, and governed by, the communities in which they are based. The Scottish Executive's national housing policy of community ownership is the epitome of this governmental rationale par excellence. Drawing upon empirical research on the 2003 Glasgow housing stock transfer, this paper argues that, whilst community ownership is underpinned by governmental rationales that seek to establish community as the new territory of social housing governance, the realisation of these political ambitions has been marred by emergent central–local conflict. Paradoxically, the fragmentation of social housing through the break-up of municipal provision, co-exists with continued political centralisation within the state apparatus.     

Coalition and Minority Government in Wales: Lessons for the United Kingdom?

Post‐devolution Wales has had experience of a variety of different types of government and a variety of different parties in government; single party rule with one party gaining an overall majority of the seats (Labour, 2003–05), minority administrations (Labour, 1999–2000, 2005–07) and coalitions between Labour and the Liberal Democrats (2000–03) and Labour and Plaid Cymru (2007 to date). This article explores the experiences of both minority and coalition government in Wales, focusing most notably on the convoluted process of coalition formation in 2007, before proceeding to draw lessons for the United Kingdom coalition government based upon developments in Wales.     

Coalition and Minority Government in Scotland: Lessons for the United Kingdom?

The United Kingdom general election result in 2010 produced a hung or balanced parliament for the first time in over three decades. Since the United Kingdom has limited postwar experience of this outcome, it is natural that commentators have begun to look elsewhere for lessons on the practicalities of minority and coalition government. This article considers the lessons we can learn from the Scottish parliamentary experience since 1999. It outlines two main points of comparison: strength and stability. One might assume that coalition provides more of both than minority government. Indeed, for that reason, it is rare for central or devolved governments in the United Kingdom to operate as minorities through choice. Yet, the Scottish experience shows that the differences between coalition and minority government are not completely straightforward. Much depends on the institutional context and, in many cases, idiosyncratic elements of particular systems. Consequently, one can identify a trade‐off in comparative analysis: as the identification of elements specific to one system increases, the ability to draw clear meaningful lessons decreases.     

Does the Likely Demographics of Affordable Housing Justify NIMBYism?

ABSTRACT

NIMBYism (not in my backyard) decreases the amount of affordable housing construction. A possible motivator for this is an existing homeowner’s fear that proximity to affordable housing depresses property value. Using a hedonic regression analysis of the sales prices of homes in Sacramento County, California, this study finds that increases in the demographic characteristics in a census tract that are likely to increase if more affordable housing is built there lower the sales price of a home. This finding holds even after controlling for the percentages of racial/ethnic groups more likely to face discrimination. Policymakers should recognize this economic element of NIMBYism as they consider instruments to increase the amount of affordable housing built. We conclude with a suggestion for a knowingly controversial policy mechanism based upon cap and trade with the hope it will spur further debate on this issue.     

Positive versus normative economics: what’s?the?connection? Evidence from the Survey of?Americans and?Economists on the Economy and?the?General?Social?Survey

Previous research suggests that positive and normative beliefs about economics are largely unrelated. Using questions from two national surveys, this study finds that: (a)?the underlying determinants of positive and normative beliefs are strikingly similar; (b)?education is by far the strongest overall determinant of both positive and normative beliefs; and (c) the variables known to push positive beliefs in the same direction as formal economic training—education, male gender, income growth, and job security—also push normative beliefs in the same direction. These results strongly suggest that the positive-normative connection has been underestimated.     

Do Surveys Provide Representative or Whimsical Assessments of the Economy?

We argue that survey responses to economic evaluation questionsexhibit instability and can be affected by fairly trivial changesin questionnaire wording. Our analyses make three empiricalcontributions to this area of survey research. First, we demonstratethat within the course of the interview there is considerableinstability in economic evaluations. Second, one source of thisinstability is cues regarding economic performance, such asthose provided by the media. We find that respondents can bepersuaded to change their economic evaluations if they receivecontradictory cues. Finally, we demonstrate that question placementcan affect economic evaluations. More specifically, we demonstratethat proximity to political questions can contaminate economicevaluations. If economic evaluations closely follow politicalpreference questions, respondents have a tendency to give economicresponses that are "consistent" with their political responses.Our empirical analysis is based on economic evaluations of respondentsto the Hungarian Markets and Democracy Survey administered duringDecember 1997.     

Is the Death of Inheritance Tax Inevitable? Lessons from America

In 2001, George Bush repealed estate tax in America. This was a shock to many in the US as inherited privilege had never been popular in a country where individuals were supposed to secure the American Dream through their own efforts. The tax had existed for over a century and only 2 per cent of the richest Americans paid it. But the repeal lobby managed to build an unlikely and broad alliance against the 'Death Tax' (as they managed to rename it). The key to their campaign was a moral case against the tax, illustrated with a few well-chosen narratives. The opposition fought back, ineffectively, with pragmatic arguments and statistics. This paper will apply lessons from America to the UK politics of taxation. It will focus on the role of lobby groups and the power of moral arguments and narrative evidence over more pragmatic arguments and 'scientific' forms of evidence.