Factors Affecting Spillover Impacts of LIHTC Developments: An Analysis of Los Angeles

Cityscape: A Journal of Policy Development and Research, Forthcoming

65 Pages Posted: 25 Jan 2023

See all articles by Brian An

Brian An

Georgia Institute of Technology

Andrew Jakabovics

Enterprise Community Partners

Jing Liu

Econsult Solutions

Anthony W. Orlando

California State Polytechnic University, Pomona - Finance, Real Estate and Law Department

Seva Rodnyansky

Occidental College

Richard Voith

Econsult Solutions

Sean Zielenbach

SZ Consulting

Raphael W. Bostic

Federal Reserve Bank of Atlanta

Date Written: January 3, 2023

Abstract

The Low-Income Housing Tax Credit (LIHTC) program is one of the largest sources of financing for affordable housing in the United States. Contrary to many residents’ fears, research typically shows that LIHTC-financed properties generate positive spillover impacts in their surrounding communities in the form of increased housing prices. Yet some critics suspect that the overall positive effects obscure the properties’ negative impacts for a significant subset of neighborhoods. We examine these concerns by assessing the housing price effects of LIHTC properties in Los Angeles. We explore how the effects differ based on various characteristics of the LIHTC property as well as various characteristics of the surrounding neighborhood. We supplement these statistical analyses with interviews of key affordable housing developers to understand their decision-making process regarding the siting and structuring of LIHTC properties. We find that, regardless of the property or neighborhood characteristics, LIHTC developments in the region have positive spillover price effects. Our findings can help inform policymakers who strive to maximize the secondary benefits of affordable housing developments.

Keywords: LIHTC, affordable housing, spillover effect, housing price, project size, subsidization level, corporate structure, neighborhood characteristics

JEL Classification: R31, R38, R21, H23, H42, G12

Suggested Citation

An, Brian and Jakabovics, Andrew and Liu, Jing and Orlando, Anthony W. and Rodnyansky, Seva and Voith, Richard and Zielenbach, Sean and Bostic, Raphael W., Factors Affecting Spillover Impacts of LIHTC Developments: An Analysis of Los Angeles (January 3, 2023). Cityscape: A Journal of Policy Development and Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4334608 or http://dx.doi.org/10.2139/ssrn.4334608

Brian An (Contact Author)

Georgia Institute of Technology ( email )

Andrew Jakabovics

Enterprise Community Partners ( email )

United States

Jing Liu

Econsult Solutions ( email )

Anthony W. Orlando

California State Polytechnic University, Pomona - Finance, Real Estate and Law Department ( email )

United States

Seva Rodnyansky

Occidental College ( email )

1882 Campus Road
90041, CA
United States

HOME PAGE: http://https://www.oxy.edu/academics/faculty/seva-rodnyansky

Richard Voith

Econsult Solutions ( email )

Sean Zielenbach

SZ Consulting ( email )

Raphael W. Bostic

Federal Reserve Bank of Atlanta

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

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