Patrick Power PRO
Economics PhD @ Boston University
Collinson et al. (2015)
The economics of Housing & Homelessness
Zooming OUt
Evans et al. (2019) and O'Flaherty (2019) focused on Homelessness
This paper (as the name suggests) focuses on Low-Income Housing
- $40 Billion on means tested programs
- $6 Billion via tax expenditures of the LIHTC
Low-Income Housing
Homelessness
Overview
- Public Housing
- Privately owned, subsidized housing
-Tenant based vouchers
Public Housing
Public Housing
Original Model
Federal Government:
Covered debt service on bonds issues to finance development costs
Local Housing Authorities
Rents covered operating costs
Starting in the early 1970s
Federal Government subsidized operational & improvement costs
Public Housing
Opposition
Private Developers
Local Residents
Concerned about crime & property values
Concerned about competition
Public Housing
Physical Design
"Super blocks" isolated and stigmatized residents
Location
Developments lead to increases in concentrated poverty and deepening racial segregation
Privately-Owned Subsidized Housing
LIHTC
Per capita allocation of tax credits ($2.90 in 2024)
Estimated that half of LIHTC tenants receive additional governmental rental assistance (O'Regan and Horn (2013))
9% tax credit and a 4% tax credit
Tax Reform Act of 1986
10 year stream of tax credits
Rents set at 30% of 60% of AMI
Housing Choice Vouchers
HCV
30% of Income goes to rent
Fair Market Rent is the locally defined rent ceiling
Oversubscribed (waitlist)
Can be combined with LIHTC units
Not time-limited
Issues
Competing/Conflicting Goals
- Target most disadvantaged
- Support operating & maintenance costs
- Avoid disincentivizing work & concentrations of poverty
On Research
"The available empirical research is limited, particularly high-quality empirical evidence that is capable of isolating causal relationships between housing programs and different outcomes of policy interest"
Housing Quality
Housing Affordability
Access to Neighborhoods
Labor Supply
Health
Children's Outcomes
Overall Well-being
Outcomes
"To date there is a small literature that uses housing-voucher lotteries suggesting that providing subsidies to previously unsubsidized households has fairly modest effects on non-housing outcomes (Mills et al, 2006, Jacob and Ludwig, 2012, Jacob, Kapustin and Ludwig, 2015). This research stands in contrast to non-experimental studies that find that at least some features of housing consumption are associated with important non-housing outcomes (see for example Leventhal and Newman, 2010)"
Experimental v.s. Non-experimental
Impact on Housing Consumption
Does Public Housing lead to more/better housing?
What's missing from this picture?
Do Housing Choice Vouchers lead to more/better housing?
What's missing from this picture?
Impact on Labor Supply
Open Questions
Open Questions
(1) In-kind housing versus cash
(2) Project based v.s. Tenant based subsidies
⋮
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On Writing
On Writing
"On the one hand, the usual assumption of declining marginal utility of consumption motivates the desire to prioritize helping the most disadvantaged families."
"The expected effects of tenant-based subsidies on the neighborhood characteristics of residents are not clear as a conceptual matter. To the extent that neighborhood disadvantage is a “dis-amenity” that is capitalized into housing prices, subsidies that enable families to rent more expensive units should expand their choice set to include more units in more advantaged neighborhoods."
Collinson et al. (2015) The economics of Housing & Homelessness
Presentation of Collinson et al. (2015)
By Patrick Power
Presentation of Collinson et al. (2015)
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