Low-Income Housing Tax Credits: 'Erecting Pockets of Poverty'

Jacqueline Rabe Thomas reports from Connecticut as an example of how policy uses low-income housing tax credits to erect pockets of poverty.

"[Connecticut] officials have chosen, year after year, to direct the bulk of public funding for affordable housing to Connecticut’s most impoverished communities," writes Thomas. "Since the mid-1980s, almost $2.2 billion in low-income housing tax credits have been awarded to construct 27,000 affordable housing units in the state. Just 10% were built in prosperous towns, an investigation by The Connecticut Mirror and ProPublica has found."

Some 80 percent of that funding was spent in struggling communities in Connecticut, making it an outlier among a national average which tends toward spending low-income housing money in impoverished areas. "In a recent federal study [pdf] of 21 states, it had the second highest concentration of affordable housing in high-poverty neighborhoods, behind only Mississippi," according to Thomas.

The article traces the systematic origins of these outcomes in Connecticut (e.g., "The state requires developers to obtain local zoning approval before they even apply for a tax credit, a practice that has been flagged by federal regulators as potentially discriminatory) and also the consequences of the pattern for the residents living in subsidized housing in these low-income communities.