Can They Afford the Rent? Resident Cost Burden in Low Income Housing Tax Credit Developments

Abstract

Although the Low Income Housing Tax Credit (LIHTC) is the primary vehicle through which subsidized rental housing is developed in the United States, we know little about whether residents in LIHTC units can actually afford their rent. This article examines affordability as defined by the cost burden measure for nearly 38,000 Florida LIHTC households. Results indicate that the majority of LIHTC residents are cost burdened, and a smaller proportion are severely cost burdened. Results are presented based on race, ethnicity, and income, with separate analyses for LIHTC tenants who do not participate in the Housing Choice Voucher program and those who do. Findings indicate that Whites typically do not fare better than minorities in terms of cost burden in LIHTC developments. Further, participation in the Housing Choice Voucher program does not necessarily prevent cost burden. LIHTC residents with household incomes between 50% and 60% of area median fare best in avoiding cost burden.