Study: Leading Subsidized Housing Program in Texas Limits Economic Opportunity of the Poor

New report finds that Low Income Housing Tax Credit housing is more likely than other rental housing to be built in low-income, predominantly minority neighborhoods.

Austin, TX – The Low Income Housing Tax Credit program, the #1 producer of affordable rental housing in Texas, concentrates its new developments in low-opportunity neighborhoods, according to a report released today by researchers at the University of Texas at Austin.

According to the study, tax credit housing is more likely to be built in lower-income, racially segregated communities, compared to rental properties overall.   Additionally, evidence indicates that 2005 reforms to how tax credits are allocated — intended to put more housing in high-opportunity neighborhoods — have been ineffective.

“The tax credit program should be designed to break — not continue — existing patterns of racial and economic segregation,” said John Henneberger, co-director of the Texas Low Income Housing Information Service. “By keeping the poor in poor neighborhoods, in neighborhoods without good jobs or quality schools, we are actively blocking the social mobility of families trying to escape poverty.”

The competitive application process for tax credit developments was changed in 2005 to add points for developments in high-opportunity neighborhoods. Yet the study finds that the new point incentive made no difference in the quality of the communities where tax credit housing is built.

In fact, the study shows that residents of tax credit housing in Houston, Dallas, Ft. Worth, San Antonio, and Austin have significantly lower access to exemplary and recognized schools than other residents of those cities.

“The program’s failure to provide housing in good neighborhoods is a problem that aggravates the crisis in public education, relegating low-income kids to the same failing schools,” Henneberger said. “We call on the state housing agency to restructure the program to ensure children living in tax credit housing have equal access to quality schools and families have equal access to quality neighborhoods and jobs.”

The full report can be found at: http://texashousers.org/wp-content/uploads/2010/12/lihtc_report_november_2010.pdf

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The Texas Low Income Housing Information Service is a 501 c(3) nonprofit policy organization that works to support low-income Texans’ efforts to obtain a safe, decent, affordable home in a quality neighborhood.