Can Local Affordability Considerations Further Segregation?

There is growing momentum in the housing field to consider local affordability in the siting of new publicly subsidized low-income housing projects. Although these considerations may be well intentioned in their pursuit of affordability, such efforts may run counter to the Fair Housing Act’s goal of ending government actions that preserve or create racially segregated communities. In this study, researchers explored whether incorporating the local affordability of housing and transportation costs in the placement of new subsidized housing projects was likely to steer such developments into predominantly Black and Hispanic* neighborhoods.

Using demographic data from the US Census Bureau, tract-level transportation and housing cost data from the Center for Neighborhood Technology’s H+T Affordability Index, and geographic data from the National Housing Preservation Database for the location of all low-income housing tax credit (LIHTC) properties, researchers conducted a national scan to understand how tract-level racial compositions relate to housing and transportation costs and the location of units developed through the LIHTC program. Researchers conducted a descriptive analysis of the siting of LIHTC properties and the association with race, transportation costs, and housing costs, followed by linear regressions to further explore the relationship between race and housing costs, race and transportation costs, subsidized housing and race, subsidized housing and housing costs, and subsidized housing and transportation costs within and across metropolitan areas. Overall, the study found that Black and Hispanic households are disproportionately concentrated in neighborhoods with the lowest transportation and housing costs and the highest concentrations of LIHTC units.

Key findings

• Nationwide, only 13 percent of white households live in census tracts with the lowest transportation costs, compared with 27 percent of Black households and 26 percent of Hispanic households. Similarly, only 12 percent of white households live in the census tracts with the lowest housing costs, compared with 33 percent of Black households and 23 percent of Hispanic households.
• Neighborhoods with low transportation costs are strongly associated with communities of color. Across the country, a 1-percentage point increase in the share of Black households in a census tract is associated with a 5.5-percentage point decrease in transportation costs. For Hispanic households, the corresponding decrease is 5.9 percentage points.
• In the 25 largest metropolitan areas, neighborhoods with low housing costs are strongly associated with communities of color. A 1-percentage point increase in the share of Black households in a tract is associated with a 20-percentage point decrease in housing costs. For Hispanic households, the corresponding decrease is even greater, at 27 percentage points.
• Nationally, a 1-percentage point increase in the share of Black households in a census tract is associated with 87 more LIHTC units in a tract, and 106 more units in the 25 largest metropolitan areas. Similarly, a 1-percentage point increase in the share of Hispanic households is associated with nearly 45 more units in a national-level tract and 62 units in the largest 25 metropolitan areas.
• More than 33 percent of existing LIHTC units are in tracts with the lowest transportation costs. In the 25 largest metropolitan areas, more than 46 percent of existing LIHTC units are in tracts with the lowest transportation costs.

Policy implication:

• Given the current concentration of Black and Hispanic households in neighborhoods with low transportation and housing costs, incorporating location affordability metrics in siting of new subsidized housing may further neighborhood segregation. To avoid this outcome, the authors suggest policymakers use the data at their disposal to develop clear and informed policies that both reduce segregation and maximize location affordability.

*The How Housing Matters editorial team decided to use the terms “Hispanic” to refer to people of Latin American origin, in alignment with the terminology used by the authors of the study. We recognize that the term “Latinx” is more inclusive of the way this group may self-identify. How Housing Matters strives to avoid language that is exclusive and will always attempt to explain the editorial rationale behind the labeling of certain groups.

Photo by Olenka Kotyk/Unsplash