A paper from the Terner Center for Housing Innovation, “How Housing Supply Shapes Access to Opportunity for Renters,” finds that in the 100 largest metropolitan areas, the number of neighborhoods in which more than 90% of the housing units are single-family homes has increased by almost 40% since 1990. Neighborhoods with such large shares of single-family homes rank high on several opportunity indicators but contain less than 10% of rental housing in major metro areas. The number of multifamily neighborhoods decreased during the same period.
The authors use data from the 2012-16 American Community Survey and the 1990 decennial Census to sort census tracts in the top 100 metropolitan areas into four types of neighborhoods, based on the share of their housing stock that are single-family homes. “Single-Family” neighborhoods are classified as tracts in which more than 90% of the homes are single-family. In “Predominantly Single-Family” neighborhoods, 70% to 90% of homes are single-family. In “Mixed” neighborhoods, 30% to 70% of homes are single-family. Finally, in “Majority Multifamily” neighborhoods, fewer than 30% of homes are single-family. The authors use data from HUD’s Low Income Housing Tax Credit (LIHTC) Project Database to examine the distribution of new LIHTC construction.
The paper highlights the significant growth in Single-Family neighborhoods and homes between 1990 and 2016. The number of Single-Family neighborhoods grew by about 40% over the period, while the numbers of every other category of neighborhood declined. Some but not all of this increase is the product of new construction—about one quarter of both Predominantly Single-Family and Mixed neighborhoods in 1990 shifted to become single-family by 2016. The increase in Single-Family neighborhoods was generally consistent across all metropolitan areas. Ninety-four metropolitan areas saw such an increase, and Predominantly Single-Family and Single-Family neighborhoods eventually comprised a majority of neighborhoods in 73 metropolitan areas by 2016. The housing stock itself grew by nearly 21 million homes between 1990 and 2016, and single-family homes accounted for almost 80% of that gain. In 2016, single-family homes made up nearly two thirds of all housing in these metropolitan areas.
Single-Family neighborhoods score highest on a set of opportunity indicators, but they are generally less affordable and accessible to renters. In 2016, Single-Family neighborhoods had higher median household incomes, education levels, and employment rates than other types of neighborhoods. Fewer than 10% of all rental homes in these metro areas are found in Single-Family neighborhoods, and the median rents are higher than in Mixed and Majority Multifamily neighborhoods (20% and 13% higher, respectively). Over 50% of renter households making less than $50,000 in Single-Family neighborhoods were severely rent-burdened.
The authors also examine trends in the distribution of LIHTC homes. About one quarter of new LIHTC production occurred in Majority Multifamily neighborhoods between 1990 and 2016, while only 7% of new LIHTC production occurred in Single-Family neighborhoods. The geographic clustering of LIHTC projects may be partially explained by their large scale, neighborhood opposition, and the higher costs of developing in higher-value neighborhoods.
Ultimately, improving geographical mobility for low-income households will require a multi-pronged approach involving federal, state, and local policy efforts. The authors argue that expanding tenant-based rent subsidies, such as Housing Choice Vouchers or a renter’s tax credit, removing barriers to the use of tenant-based subsidies, and streamlining housing production processes in high-opportunity areas would improve choices and increase the housing supply for subsidized households. In their view, allowing LIHTC to finance more diverse housing types and scaling up other forms of financing, such as Washington State’s Multifamily Tax Exemption program, would also help boost the supply of affordable housing in high-opportunity areas.
The full paper can be read at: https://bit.ly/2rV64Br