To What Extent do Low Income Housing Tax Credits Impact Economic Segregation Patterns?

Created in 1986, the Low Income Housing Tax Credit Program (LIHTC) is the largest federal funding source for the development of affordable housing. The program has financed over 1.8 million affordable units targeted towards a range of income levels, all of which are all below the median income of the metropolitan area where the project is constructed. While generally considered a highly successful program, some affordable housing advocates have voiced concerns that the LIHTC may be perpetuating economic and racial segregation patterns, contrary to the mandates of fair housing legislation. This study examines the degree to which the LIHTC impacts geographic concentrations of poverty. Using indexes which measure the level of segregation of residents living in poverty, the study asks if LIHTC-funded developments impacted changes in economic segregation within metropolitan areas from the 1990 to the 2000 census.