University of Michigan Gateway Ford School

Assessing Changes in Neighborhoods Hosting the Low-Income Housing Tax Credit Projects

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February 2009

Lan Deng

Abstract

This study examines how neighborhoods hosting the Low-Income Housing Tax Credit projects in Miami-Dade County have changed from 1990 to 2000 and how these projects have affected their neighborhoods. The study applies a cluster analysis to identify the neighborhoods that are similar to LIHTC neighborhoods. It then compares changes in LIHTC neighborhoods with the median changes experienced by similar neighborhoods without the LIHTC.

The study finds that most of the LIHTC neighborhoods have experienced more positive changes than their control groups; however, the effects vary by neighborhood contexts. LIHTC invested in high-poverty neighborhoods is the most likely to generate positive impacts, while LIHTC invested in middle-class neighborhoods is the least likely to do so. The effects are more mixed in working-class neighborhoods. Further case-studies show that LIHTC is successful at promoting neighborhood revitalization when it is strategically concentrated and part of cumulative efforts. These case studies, however, also raise concerns about the overconcentration of LIHTC units in vulnerable suburban neighborhoods.

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Keywords: Housing, Land Use, Public Finance & Taxation

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