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

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

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

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."