Subsidy Overlaps in Federal Housing Policy

Abstract

There is limited and incomplete empirical evidence that documents the extent of overlap, or layering, between federal housing programs, including supply-side subsidies, such as the Low-Income Housing Tax Credit (LIHTC), and demand-side rental assistance. Importantly, we know little about how the overlap varies by time, by geography, and in different housing market conditions. This project uses administrative data collected by federal agencies and public housing authorities to describe over time, at the national level, (a) the percentage of rental assistance recipients that reside in LIHTC units, (b) the percentage of LIHTC units that house a tenant who receives rental assistance, and (c) the number of LIHTC developments that include at least one recipient of rental assistance. Key findings are that there is significant overlap in programs and the level of overlap has increased meaningfully over time. From 2006 to 2018, the share of tenant-based rental assistance used in LIHTC units doubled. The article also highlights the changes that are needed to generate a more accurate national picture of the LIHTC program and overlap with other federal housing programs. These results will help inform debates about federal low-income housing policy and how these scarce housing supports are allocated.

Keywords:

• Low-income housing
• policy
• affordability

Acknowledgments

Partial support for this research came from a Eunice Kennedy Shriver National Institute of Child Health and Human Development research infrastructure grant, P2C HD042828, to the Center for Studies in Demography & Ecology at the University of Washington. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health. Additional support for this research came from support to CSDE from the College of Arts & Sciences, the UW Provost, eSciences Institute, the Evans School of Public Policy & Governance, College of Built Environment, School of Public Health, the Foster School of Business, and the School of Social Work.

Disclaimer

Any opinions and conclusions expressed herein are those of the authors and do not represent the views of the U.S. Census Bureau. The Census Bureau has reviewed this data product to ensure appropriate access, use, and disclosure avoidance protection of the confidential source data (FSRDC Project No. 2137, Disclosure Review Board (DRB) approval number: CBDRB-FY21-P2137-R9116).

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Our national estimate of subsidy overlap is an undercount due to data limitations outlined in the Data and Methods section.

2 Public and Indian Housing and Information Center (PIC) and the Tenant Rental Assistance Certification Systems (TRACS), together PICTRACS.

3 We appreciate the comments made by an anonymous reviewer in highlighting the importance of this issue.

4 Tenant-based data provided to HUD by HFAs indicates a similar level of overlap. According to these data, in 2019, 39 percent of LIHTC developments had at least one tenant receiving some form of federal rental assistance. This is close to the 41 percent overlap that we observe in our data. Like the data we use for our estimates, these HFA/HUD data also have limitations due to inconsistent reporting, and a number of developments do not report the programmatic source as described in HUD’s documentation. These data are made publicly available for 2019 at the property level for over 34,000 properties and can be accessed under 2019 LIHTC Tenant Data by Property in Table 12: https:/www.huduser.gov/portal/Datasets/lihtc/2019-LIHTC-Tenant-Data-Tabulated-by-Property.zip.

5 When public housing and other multi-family programs, such as Section 236 and Section 202, are included, the sum of all housing assistance programs from the federal government is approximately 7.9 million. If one assumes that there is no additional subsidy overlap (which may not be a fair assumption) when adding the public housing and multi-family programs, there are 7.35 million unique households that receive at least one federal housing subsidy.

6 Because of the restricted environment in which this analysis was completed, the ability to modify regression analyses was limited without significant delay. As a result, certain enhancements to these models, such as including state fixed effects, were excluded.

7 One possible explanation of this finding is that many 9% projects are designed to house very low-income households, a population that is served by rental assistance programs. This could be one explanation for greater overlap in 9% projects than for 4% projects, which typically do not serve the lowest income households.

8 There are financial benefits for owners/operators of LIHTC units to house voucher tenants. One possible explanation for this finding is that for-profit developers more aggressively seek out the additional revenue provided by tenants who have a voucher.

Additional information

Notes on contributors

Gregg Colburn

Gregg Colburn is an Associate Professor in the Runstad Department of Real Estate in the College of Built Environments at the University of Washington. He conducts research on housing markets, housing policy, and homelessness.

Arthur Acolin

Arthur Acolin is an Associate Professor of Real Estate in the University of Washington’s College of Built Environments. His research focuses on how housing markets and policies affect households’ access to housing.

Rebecca Walter

Rebecca J. Walter is an Associate Professor in the Runstad Department of Real Estate at the University of Washington. Dr. Walter’s research is focused on policy innovation in low-income housing and urban development initiatives that enhance public safety.