Do Low-Income Rental Housing Programs Complement Each Other? Evidence from Ohio

Barkley, Brett; Higgins, Amy; Richter, Francisca

Working Paper

Do Low-Income Rental Housing Programs Complement Each Other? Evidence from Ohio

Abstract: We characterize rental subsidy use in units developed with construction subsidies and explore whether the subsidy overlap responds to needs unmet by a tenant-based program alone. We present a subsidy allocation model allowing for program complementarity to guide our analysis of multiple subsidy use in Low Income Housing Tax Credit (LIHTC) units. Findings for Ohio in 2011 suggest that rental assistance in LIHTC exhibits some degree of subsidy complementarity, particularly, when serving very poor households with special housing needs. We also find that very low income voucher holders who face a less affordable market or a potential gain in neighborhood quality are attracted to use their voucher in a LIHTC unit. However, our analysis finds a significant portion of households in LIHTC units that could seemingly be housed in the private rental market, signaling some degree of inefficient allocation of subsidies.

Keywords: Affordable Housing; housing choice vouchers; Low-Income Housing; Tax Credit; Housing Policy; Neighborhood Quality; Poverty;

JEL Classification: H71; R23; R38;