The geographic distribution of affordable housing developments created under the Low Income Housing Tax Credit Program (LIHTC) is the subject of a research report released by HUD.  The researchers found that LIHTC properties tend to be clustered in areas with higher concentrations of poverty and minority populations. 

The findings indicate that criteria of the LIHTC program may be a contributing factor to the clustering of low income housing in economically underdeveloped areas.  A change in the requirements for participation in the LIHTC program may better facilitate the goal of spreading out low income housing throughout the country.

Using HUD’s geocoded database of completed Low Income Housing Tax Credit projects, which dates back to 1987, researchers looked at the geographic distribution of housing projects within 10 metropolitan statistical areas (MSAs).  They compared the clustering of housing projects to see how it compared to a simulated distribution with “complete spatial randomness” and published their findings in a report.

The main findings from the report include:

• In all metropolitan areas, LIHTC properties are more highly clustered than housing units, although the extent of clustering differs by metropolitan area.
• LIHTC clusters tend to be located in more densely-developed central city locations that have higher poverty rates and lower shares of non-Hispanic whites.
• Clusters are more likely to be located in Qualified Census Tracts (QCTs) and Difficult to Develop Areas (DDAs) in most metropolitan areas.

A summary of the report can be found here  and the full report can be found here.