LIHTC in TOD? The Distribution and Correlates of LIHTC Housing Supply in U.S. Station Areas, 2000–2020

Source abstract

As the largest source of affordable rental housing in the U.S., the Low-Income Housing Tax Credit (LIHTC) program has long been at the center of debates regarding its locational patterns and outcomes for tenants. We explore the potentially competing policy objectives of fair housing, community development, and location efficiency by examining the distribution and correlates of LIHTC housing supply in fixed-route transit station areas between 2000 and 2020, comparing the patterns with overall housing supply in the same geographies. We find that LIHTC was a significant source of housing supply in both station areas and adjacent buffer areas, particularly in transit-oriented development (TOD) census tracts. Multilevel hurdle models reveal that, with demographic and housing market controls, TOD typology does not independently predict whether a tract receives LIHTC, and tract selection is instead associated with a higher minority population, larger existing housing stock, higher share of renters, higher vacancy rate, higher poverty rate, lower market rents, and a more central location. Interaction terms reveal that the greater likelihood of LIHTC in high-poverty station areas is specific to dense and pedestrian-friendly TOD environments. Further, conditional on any new LIHTC units, TOD tracts receive fewer units than comparable transit-adjacent tracts. While incentives for siting LIHTC near transit in Qualified Allocation Plans (QAP) are not associated with tract selection, they predict greater supply conditional on any new LIHTC units. Comparison with overall housing supply reveals important divergences, in particular, concerning race and rents. We conclude with policy implications.