The Effects of U.S. Low-Income Housing Programs on Recipient Consumption and Wellbeing

56 Pages Posted: 26 Jun 2023

See all articles by Edgar O. Olsen

Edgar O. Olsen

University of Virginia - Department of Economics

Dirk W. Early

Southwestern University - Department of Economics and Business

Multiple version iconThere are 2 versions of this paper

Date Written: June 22, 2023

Abstract

This paper is the first to provide evidence on several key aspects of the comparative performance of the major types of housing assistance in the U.S. – HUD’s public housing and housing voucher programs, its largest programs that subsidize the operation of privately owned housing projects, and a set of other programs dominated by low-income housing tax credits. The aspects studied are the effects of the programs on the overall desirability of the housing and neighborhoods occupied by their participants and their aggregate consumption of non-housing goods and services, their net benefit to the decisionmakers in these households, the taxpayer cost incurred to provide these benefits, and the difference in mean benefits across recipients and eligible households with different demographic characteristics. The primary data is from the 2013 American Housing Survey national sample that identifies the type of housing assistance received by most households based on HUD’s administrative records. The results indicate that HUD’s largest programs lead to a much greater percentage increase in recipient consumption of non-housing goods than in their consumption of housing services. For HUD’s project-based assistance, the improvement in housing conditions is negligible. For the conglomerate of LIHTC and other programs, the percentage increase is greater for housing consumption than for other goods, but both percentages are quite small. Tenant benefit per dollar of taxpayer cost is much larger for the housing voucher program than for HUD’s public housing program or its largest programs that subsidize the operation of privately owned projects. It is even smaller for the programs that subsidize the construction of tax credit projects.

Keywords: Low-income housing programs, housing vouchers, public housing, LIHTC

JEL Classification: H53, I38, R28

Suggested Citation

Olsen, Edgar O. and Early, Dirk W., The Effects of U.S. Low-Income Housing Programs on Recipient Consumption and Wellbeing (June 22, 2023). Available at SSRN: https://ssrn.com/abstract=4488590 or http://dx.doi.org/10.2139/ssrn.4488590

Edgar O. Olsen (Contact Author)

University of Virginia - Department of Economics ( email )

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Dirk W. Early

Southwestern University - Department of Economics and Business ( email )

1001 East University Avenue
Georgetown, TX 78626
United States
513-863-1592 (Phone)

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