Locating Affordable Housing: The Legal System's Misallocation of Subsidized Housing Incentives

34 Pages Posted: 28 Dec 2018

See all articles by Brandon M. Weiss

Brandon M. Weiss

American University - Washington College of Law

Date Written: December 2, 2018


The primary goal of subsidized housing policy in the United States is to increase access to affordable housing for low-income households. Yet data show that states disproportionately award low-income housing tax credits to finance the development of projects in neighborhoods where there is already a relatively high number of housing units available at similar rent levels. Through a fifty-state study of state housing agency allocation rules, this Article evaluates the legal apparatus that facilitates this “misallocation problem.” I find that approximately seventy-five percent of states fail to make the provision of below-market rents a threshold requirement of receiving an award of low-income housing tax credits. As a result, locational choices often are dictated by private developers who are incentivized to develop where land is cheapest. I argue that states should revise their allocation rules to ensure that, as a default, tax credits are awarded to projects that offer at least a ten percent rent advantage as compared to the local private market. The Article considers challenges to this proposal related to lack of state housing agency autonomy, federal framework limitations, land costs, and local political opposition and, in each case, offers a variety of responses.

Keywords: Housing, Affordable Housing, Community Development, Low-Income Housing Tax Credit, LIHTC, Public Private Partnership, Community Economic Development, HUD, Public Policy

Suggested Citation

Weiss, Brandon M., Locating Affordable Housing: The Legal System's Misallocation of Subsidized Housing Incentives (December 2, 2018). Hastings Law Journal, Vol. 70, 2018, Available at SSRN: https://ssrn.com/abstract=3300226

Brandon M. Weiss (Contact Author)

American University - Washington College of Law ( email )

4300 Nebraska Avenue, NW
Washington, DC 20016
United States

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