As the nation’s largest affordable housing development program, the Low-Income Housing Tax Credit (LIHTC) has substantial influence on where low-income families are able to live. LIHTC developments in low-poverty neighborhoods with strong schools and low crime can be particularly beneficial, since research shows living in those neighborhoods can have a range of benefits including raising children’s long-run earnings and chances of attending college.
However, as the data below show, in most states much lower shares of LIHTC units are located in low-poverty neighborhoods (where less than 10 percent of residents are poor), compared to the share of all rental units located in those neighborhoods. LIHTC has made some progress on this score, and the share of LIHTC units placed in low-poverty neighborhoods has grown modestly in recent years. Federal, state, and local policymakers could build on that progress by instituting policies that encourage development of LIHTC housing in low-poverty neighborhoods and ensure that even the most disadvantaged families have access to that housing.