Study Explores Experiences of LIHTC Residents and Perceptions of Their Neighborhoods

A recently published study in Housing Policy Debate, “Rethinking Opportunity in the Siting of Affordable Housing in California,” found that residents’ perspectives on housing affordability, neighborhood conditions, and access to educational and economic opportunity can differ from commonly used measures.

In 2017, California revised its Qualified Allocation Plan to encourage more LIHTC development in high-opportunity neighborhoods, with the goal of improving residents’ economic mobility. However, very little research exists on LIHTC residents, their barriers to economic mobility, or their neighborhood preferences. The study drew upon qualitative surveys and interviews with residents living in 18 LIHTC sites across California to explore the links between housing affordability, neighborhood conditions, and access to educational and economic opportunity.

The study’s findings suggest that LIHTC residents’ perceptions of their neighborhoods and opportunities don’t necessarily align with standard metrics often used in “opportunity maps.” Residents in the study shared that barriers to opportunity might not be driven by neighborhood factors as much as by larger issues in education and the labor and housing markets.

Many residents learned about their property through a local connection. Nearly one-third of participants had a friend or family member living at the property or another property managed by the same company. Approximately 28 percent of participants learned about their property simply by walking by it during construction, and another 10 percent were referred by a social service or nonprofit agency. These findings suggest social connections play a key role in steering residents to LIHTC properties, which may result in the clustering of demographics.

Nearly 50 percent of participants lived in the same ZIP code prior to moving into their current LIHTC home. Seventy percent of residents had moved from a neighborhood with a similar level of poverty, 20 percent had moved from a lower-poverty neighborhood, and 10 percent had moved from a higher-poverty neighborhood.

Residents reported significant challenges prior to becoming LIHTC residents. Fifty percent of participants worried about paying for rent prior to moving into their LIHTC home, 40 percent reported previous food insecurity, 20 percent moved as the result of an eviction or rent increase, and 20 percent were previously homeless. Participants commonly cited the affordability and quality of their unit as their primary motivation for moving, eclipsing concerns about neighborhood quality. Another theme that emerged from resident interviews was the lack of social stigma associated with living in a LIHTC home, especially compared to other forms of housing assistance such as public housing or Section 8 assistance.

Study participants also shared how their LIHTC home afforded them economic stability. Over one-third of participants reported activities typically associated with economic mobility, such as learning English or pursuing a high school or college degree. Participants also, however, highlighted significant barriers to economic security and mobility inherent in the low-wage and low-skill labor market. Participants did not appear to struggle with finding work, but they struggled with low wages, poor benefits, and job insecurity.

Many participants viewed the housing stability provided by their LIHTC rental unit as a buffer to the instability of the low-wage, low-skill labor market. Residents also cited issues of educational opportunity that were more closely related to city-wide or school-district-wide issues than to their neighborhood. In terms of economic mobility, respondents tended to focus on these larger issues in the labor market and on education instead of their neighborhoods.

Overall, the study found that LIHTC residents’ perceptions of a positive neighborhood environment can differ from empirical measures of neighborhood opportunity. The author emphasized that these findings should not be used to undermine current efforts to promote more affordable housing in neighborhoods of higher opportunity to provide low-income households with more residential choice.