In Harm's Way? The Effect of Disasters on the Magnitude and Location of Low‐Income Housing Tax Credit Allocations
Name
Brennan Mehta Steil 2022 In Harms Way Effects of Disasters on LIHTC Allocations.pdf
Description
Accepted version
Size
969.45 KB
Format
Adobe PDF
Checksum (MD5)
a274c6657e3d738a5bd187b827862a9d
Author(s)
Brennan, Mark
Mehta, Aditi
Steil, Justin
Date Issued
March 2022
Journal
Journal of Policy Analysis and Management
Publisher
Wiley
Citation
Brennan, M., Mehta, A. and Steil, J. (2022), In Harm's Way? The Effect of Disasters on the Magnitude and Location of Low-Income Housing Tax Credit Allocations. J. Pol. Anal. Manage., 41: 486-514.
Version
Author's final manuscript
Abstract
This paper analyzes the effect of disasters on affordable housing construction. Exploiting the exogenous timing of disasters and 26 years of affordable housing data, we derive causal estimates of the effect of severe floods on county‐level Low‐Income Housing Tax Credit (LIHTC) allocations nationwide. We find that states respond to severe floods by increasing the number of LIHTC units per capita allocated to a flood‐struck county by 57 percent in the year after the disaster, compared to other years. We argue that this increased allocation of LIHTC units is indicative of a process of institutional or policy conversion, in which states are repurposing the three‐decade‐old housing tax credit program to meet contemporary disaster assistance and recovery needs. Given that the LIHTC program was not designed with disasters in mind, do the new units ameliorate or exacerbate renters' exposure to disaster risk? We find that severe floods are associated with a significant increase in LIHTC units per capita allocated outside of the 500‐year floodplain in an affected county within the three years after a severe flood. These findings suggest that states and housing developers are using the LIHTC program to support disaster recovery by expanding subsidized rental options in disaster‐struck counties and ameliorating risk to low‐income renters by locating those units outside of floodplains.
MIT Department
Massachusetts Institute of Technology. Department of Urban Studies and Planning
Terms of Use
Creative Commons Attribution-Noncommercial-ShareAlike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1002/pam.22373
