| Description |
The Low-Income Housing Tax Credit (LIHTC) is a federal fiscal policy that supports the new construction and rehabilitation of affordable, low-income rental housing. Previous research on the LIHTC analyzes its effectiveness in revitalizing neighborhoods but little research has been done to analyze its success as a solution for providing sustainable low-income housing in an effort to prevent eviction. A current nationwide shortage of affordable housing units is contributing to an eviction crisis. Policymakers believe that increasing the affordable housing stock will be a key factor in reducing eviction rates. This paper uses a series of two-way ordinary least squares (OLS) regressions to determine if there is a negative correlation between the LIHTC allocation amount and eviction rates in the counties of seven Mountain West states namely, Arizona, Colorado, Idaho, Montana, Nevada, Utah, and Wyoming. Results from this study find that there is a statistically significant decrease in eviction rates (-0.14%) for every million dollar increase in LIHTC. Furthermore, I find that the correlation between LIHTC and eviction rates is only statistically significant at the highest level of allocation amount (in the 95-99th percentile) resulting in a -0.31 percentage point change in eviction rates for every million dollars allocated. I conclude that LIHTC is an effective tool to generate new affordable housing stock and impact eviction rates. |
