Terner Center Blog: No Limits

Category Archives: Expanding Access to High Quality Homes and Communities

A ‘Safe Haven’: Resident Stories Convey the Benefits of Affordable Housing

The Low-Income Housing Tax Credit (LIHTC) has become the most important funding source for affordable housing development in the United States, producing nearly 3 million housing units since its inception in 1986 and housing over 13 million people.

Despite its significance in the housing market, relatively little research has been undertaken to document and understand the experiences of residents living in LIHTC-funded properties. Today, the Terner Center is releasing a new study addressing this research gap. Our analysis sheds light on how living in LIHTC properties impacts low-income residents, particularly with regard to housing stability, economic mobility, and access to education.

We conducted interviews and surveys with over 250 residents living in 18 properties across California, located in neighborhoods with varying levels of poverty. Overall, the results of the survey reveal many advantages to living in a LIHTC-funded property.

Unsurprisingly, affordability was the greatest benefit reported by LIHTC residents. In describing their living situations prior to moving into a LIHTC property, residents reported conditions that were unaffordable, unsafe, and dire. One in five of those surveyed said that they had experienced homelessness before moving into their current unit, with another twenty percent reporting that they had been forced to move involuntarily, either as the result of an eviction or rent increase.

Housing and Financial Situation Prior to Moving into LIHTC Unit

In contrast, living in a LIHTC building provides much needed housing stability, which in turn positively impacts residents lives.  One of the most common terms used to describe their new home was a “safe haven,” a place where residents are protected from sharp rent increases or poor living conditions.  In turn, this housing stability allowed residents to improve their work prospects and invest in their own and their children’s education.

The majority (58 percent) of working-age residents we surveyed were employed. We also found that the educational outcomes in the schools that LIHTC residents in our sample attend are on par with California averages, and that the majority of parents were happy with their children’s school. Another positive finding: nearly 60 percent of college-aged children in the sample were enrolled in college.

Yet many of the residents’ jobs were precarious, and lacked good wages, benefits and opportunities for advancement.  Residents articulated the challenges of earning enough to find any other housing they could afford.

The Job Characteristics of LIHTC Residents

Beyond considering affordability, employment and educational outcomes, the study offers insights into how residents perceive their neighborhoods, capturing a far more nuanced appraisal of communities than is often captured in data. Many residents feel strong ties to the neighborhood, even when poverty rates are high, and see the benefits of investing in the neighborhood as a way to promote community development and ensure affordability in the face of gentrification pressures. This aspect of the study provides important context for recent regulatory focus on the siting of LIHTC and other affordable housing properties: we conclude that while LIHTC policy has a role to play in promoting fair housing goals, it is important not to forget that neighborhoods in California are changing rapidly, and that residents often develop strong social and cultural ties to the places they live.

Finally, the study highlights that siting LIHTC buildings in lower poverty neighborhoods is insufficient on its own to expand opportunity for low-income, working families. In spite of the study’s positive findings, broader housing market and labor conditions are likely to keep most residents in LIHTC properties for the foreseeable future; constrained supply and low wages make it nearly impossible for LIHTC residents to find similar quality housing they can afford on the private market.  Research and policy devoted to expanding housing options for those at 80-120 percent AMI is needed to ensure LIHTC can serve as platform for economic and housing mobility. In addition, the state should continue to identify policies that encourage cities to identify and zone land for multifamily housing, boosting overall supply. Further research is also needed to explore the outcomes for LIHTC tenants across the United States to better understand the role that affordable housing plays in promoting economic mobility.  Nonetheless, this study provides an important snapshot of the experiences of LIHTC tenants in California, and gives us a better understanding of the impact of this important tool in the affordable housing landscape.


Renting the Dream: The Rise of Single-Family Rentals

Posted on by Carolina Reid, Carol Galante, Rocio Sanchez-Moyano

Tenants living in single-family homes in the United States represent the fastest growing segment in the housing market today, but neither academic literature nor public policy has kept pace with their growing importance. Today, the Terner Center is releasing a new study seeking to better understand this group of renters, the homes and neighborhoods they occupy, and the policies that might better support their success. Our study presents data on single-family renters living in a range of housing markets across the country. Our first question: why has this market segment grown so fast? In short: a boom in single-family home…


New State Policies Aim to Boost Access to Opportunity through Housing

Posted on by Elizabeth Kneebone and Carolina Reid

In California, the Tax Credit Allocation Committee (TCAC) plays an important role in determining where and how Low Income Housing Tax Credits (LIHTC) get allocated for the production of affordable housing. On Wednesday, TCAC adopted a series of policy changes aimed at increasing the development of affordable housing options for families in higher opportunity communities, signaling a commitment to advancing fair housing goals amid the state’s broader agenda to address California’s housing crisis. The regulations seek to respond to a growing body of evidence that communities that provide low-income families access to good schools and safer, lower-poverty, and less segregated…


A Reform Proposal for the Federal Housing Administration

Posted on by Carol Galante

Media reports and other sources in Washington, D.C. suggest momentum is building for housing finance reform. According to a recent piece in National Mortgage News, “the White House and congressional GOP are eyeing a tight window between tax reform and the 2018 midterms to pass housing finance reform. And with key policymakers readying their exit, the effort could be the most concerted push yet.” As policymakers debate the future of the nation’s housing finance system, I urge them not to overlook both the importance of the Federal Housing Administration and the improvements it needs in order to fulfill its mission and…


From Small Steps to Giant Leaps: What Must Come Next for the California Housing Agenda?

On Friday, September 15th, the California Legislature approved a package of 17 bills aimed at putting a dent in the state’s housing crisis. While the votes came down to the wire, in the end, the need for solutions won the day, and in the coming weeks the Governor is expected to sign each piece of legislation, officially ushering in the most significant housing policy changes in recent memory. You can read our recap of these bills in an earlier blog post here. Drafting, amending, defending and eventually passing these bills was no small feat, and the legislature, the Governor and…


Modular Construction in the Bay Area: The Future is Now

This post originally appeared on the ULI San Francisco Blog on August 2, 2017. After years of abstract discussions and false starts, modular building may finally be gaining the momentum it needs to make an impact in the Bay Area. Why now? And why here? On Tuesday, July 18, the San Francisco District Council of the Urban Land Institute hosted “Modular Construction in the Bay Area: The Future is Now”, an event moderated by Terner Center for Housing Innovation Faculty Director Carol Galante. The panel discussion featured four leaders committed to bringing this innovative housing method to scale in the Bay Area: Developers Rick Holliday of Holliday…


Highlights from the Terner Center Promoting Affordability Conference

Though U.S. cities like Boston, New York, San Francisco and Los Angeles are important engines of the American economy, their rapid growth in jobs and populations has not been met with a comparable pace of growth in housing. The result? Increasing pressure on both the rental and for-sale housing markets, and skyrocketing costs of living for a larger and larger proportion of the people who live in these cities.  On Thursday June 1, the Terner Center hosted a special convening intended to delve into this issue, exploring solutions to that could help expand the supply of housing, lower the cost…


Opening Doors to Homeownership Series Part 1: Lease-Purchase

Posted on by Carol Galante, Carolina Reid, Rocio Sanchez-Moyano

A number of recent studies suggest that the American Dream, with its promise of upward mobility, is diminishing for current and future generations as the racial wealth gap grows and access to opportunity shrinks. This troubling trend is most evident in one of the dream’s most potent symbols: homeownership. In recent years, alongside widening inequality, rates of homeownership among young adults and minority families have declined precipitously and, in 2016, the national homeownership rate fell to its lowest level in more than 50 years.  What explains this trend? Working families (and especially lower-income and minority households) seeking to buy their…


Balancing the Burden: Proposing a FAIR Tax Credit for Renters Facing Affordability Challenges

Posted on by Carol Galante, Carolina Reid, and Nathaniel Decker

By most accounts, rents have never been higher. In the United States, over 21 million people see more than 30 percent of what they earn go to rent each month. And over 11 million Americans are paying more than 50 percent of their income to rent their home, leaving little left over for other essentials like healthcare and food, and leaving too many facing a precarious stretch of days until their next paycheck. And this is not just a problem of poverty: because rents have risen faster than incomes, even renters who are working full-time and earning modest wages are…