Complementary policies for multidimensional problems: Does the low-income housing tax credit complement homeless services in the USA?

Abstract

Governments use multiple policies targeting different severities of housing insecurity to address multidimensional urban problems such as homelessness, where poverty and unaffordable housing intertwine with many causes and contexts. Previous studies have focused on the determinants of housing insecurity or using affordable housing alone but not on how using multiple policies jointly reduces homelessness. We explore if affordable housing created by the low-income housing tax credit (LIHTC) complements homeless services through the housing security network in decreasing homelessness in communities. Utilising a first-differenced model with panel data from 2007 to 2015, results indicate that LIHTC unit developments complement homeless services in moderately reducing homelessness when both policies are used relative to only using homeless services. Studying multiple policies addressing homelessness creates a useful application of theory on complementary policies to see how affordable housing with homeless services affects homelessness at the community level.