Page 17 - Balancing Priorities
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BALANCING PRIORITIES: Preservation and Neighborhood Opportunity in the Low-Income Housing Tax Credit Program Beyond Year 30 Expiring affordability restrictions might even be desirable from this point of view given historical siting patterns of LIHTC units. From this perspective, the degree to which at-risk LIHTC units provide access to opportunity could be used to establish priorities for preservation efforts. LIHTC units, especially those owned by for-pro ts, reaching the end of their affordability restrictions in neighborhoods that rank high or very-high in both desirability and opportunity are obvious candidates under these criteria, since they are at greater risk for conversion to unaffordable market-rate housing, offer tenants the greatest access to opportunity, and less likely to be in segregated minority neighborhoods.11 These units would be dif cult to replace since development costs and neighborhood opposition are likely higher in these neighborhoods. In addition, low-income tenants in these properties would likely have a more dif cult time than tenants in less desirable neighborhoods  nding a similar unit in a similar neighborhood at an affordable price without additional rental assistance. The 13% of LIHTC units reaching Year 30 between 2020 and 2029 in very-low or low desirability neighborhoods that offer high or very-high levels of opportunity would also be a priority. These units may be less likely than those in highly desirable neighborhoods to convert to unaffordable market-rate housing, but owners could face dif culty meeting capital needs for physical improvements due to lower rental income. The 42% of expiring units in neighborhoods that rank very-low or low in both desirability and opportunity, or particularly the 19% of units in neighborhoods that are very- low in both, would be less of a priority for preservation if access to opportunity and desegregation are policy priorities. Not preserving, or preserving fewer, LIHTC housing in these neighborhoods could result in housing instability for tenants and disproportionately affect minority families. LIHTC tenants who are the poorest, Hispanic, or black are more likely than higher income or white LIHTC tenants to reside in neighborhoods with lower opportunity (Ellen, Horn, and Kuai, 2018). 11 Sixty-six percent of expiring LIHTC units were in neighborhoods with a relatively high share of non-white population, compared to 18% of expiring LIHTC units in neighborhoods of high/very-high opportunity and desirability, and 84% of expiring LIHTC units in neighborhoods of low/very-low opportunity and desirability. A high share of non-white population was de ned as one where the neighborhood’s % of population who was non-white was in the upper two quintiles (top 40%) of the region. NATIONAL LOW INCOME HOUSING COALITION AND THE PUBLIC AND AFFORDABLE HOUSING RESEARCH CORPORATION 17 On the other hand, if decision-makers want to pursue an affordable housing policy that promotes housing stability or community development, then decision-makers have an obligation to preserve LIHTC units in neighborhoods with lower opportunity to prevent the displacement of tenants, the reduction of housing options, and community disinvestment. To this end, resources would be aimed at preserving LIHTC housing to the greatest extent possible, regardless of their neighborhoods’ opportunity. Scarce resources lead to an apparent dilemma in establishing priorities for preservation: A decision not to preserve LIHTC housing in lower opportunity neighborhoods 

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