Affordable Housing, Disasters, and Social Equity

Abstract

Problem, Research Strategy, and Findings: The Low-Income Housing Tax Credit (LIHTC) is the most common financing mechanism for the production of subsidized housing in America. We investigate how and to what extent states are currently using LIHTC to prepare for and recover from disasters. We systematically code guidelines in the 2017 LIHTC qualified allocation plans from 53 states and territories to identify disaster-related provisions. Twenty-four states and territories include provisions for preparedness or recovery in their allocation plans, of which 13 include only preparedness provisions, three include only recovery provisions, and eight include both types. Preparedness provisions address project design and siting, whereas recovery provisions direct credits to disaster-affected areas or the replacement of damaged units. Using t-tests, we compare three sets of states-those without any disaster-related provisions, those with either preparedness or recovery provisions, and those with both types of provisions-across measures of housing cost, demographic composition, disaster exposure, and political ideology. States with higher homeownership rates, lower home values, and lower rents are more likely than other states to have either or both types of provisions. Future research should investigate why this trend is the case to better inform affordable housing policy. Takeaway for Practice: State governments could mitigate disaster-related hazards and help speed recovery by including locallyrelevant preparedness and recovery provisions in their LIHTC allocation plans. These provisions could incentivize resilient construction, weigh the social costs and benefits of LIHTC construction in floodplains, or waive program rules to address post-disaster housing shortages.

In Harm's Way? The Effect of Disasters on the Magnitude and Location of Low‐Income Housing Tax Credit Allocations

“…The fact that states and affordable housing developers are largely making these difficult decisions on a state‐by‐state and project‐by‐project basis highlights the need for more explicit conversations about the role that the LIHTC program plays in disaster recovery. These findings are particularly interesting given the lack of explicit disaster recovery provisions in most LIHTC allocation plans (Mehta, Brennan, & Steil, 2020) and the rarity of changes to plans after severe disasters (Shamsuddin & Leib, 2021). Mehta, Brennan, and Steil (2020) find that only 24 states and territories include some explicit provisions for disaster preparedness or recovery in their allocation plans, and of those only 11 include any mention of disaster recovery.…”

“…These findings are particularly interesting given the lack of explicit disaster recovery provisions in most LIHTC allocation plans (Mehta, Brennan, & Steil, 2020) and the rarity of changes to plans after severe disasters (Shamsuddin & Leib, 2021). Mehta, Brennan, and Steil (2020) find that only 24 states and territories include some explicit provisions for disaster preparedness or recovery in their allocation plans, and of those only 11 include any mention of disaster recovery. This contrast between formal provisions in LIHTC allocation plans and the findings here suggest that housing finance agencies do respond with increased allocations despite not having included disaster recovery in their allocation criteria at the outset.…”

“…Nevertheless, there are no federal statutes, rules, or permanent guidance regarding the use of LIHTC allocations for disaster recovery. Formal state adoption of disaster recovery provisions in their LIHTC allocation plans has been piecemeal at best, with fewer than half of states and territories including any provisions related to disaster preparedness or disaster recovery in their plans (Mehta, Brennan, & Steil, 2020; Shamsuddin & Leib, 2021).…”

Spatial distribution of socio-demographic and housing-based factors in relation to flash and slow-rise flooding hazards in the U.S

“…A growing body of research has investigated associations between spatial distributions of social vulnerability 4 and exposures to pre-and post-flood hazards [11][12][13][14][15][16][17]. Most studies suggest that lowincome households, racial and ethnic minorities [18][19][20], as well as households that rent [21][22][23], may be more vulnerable to adverse outcomes associated with flooding. Often, people with the least capacity to prepare, respond, and recover from flooding events also tend to live where their exposure to such events is greater [23,24].…”