Press Release: Monday, August 19, 2013

Study Finds Housing Program Perpetuates Segregation

Report Advocates Changes to Expand Housing Choice and Reduce Segregation

New York, NY – On August 19, 2013, the Fair Housing Justice Center (FHJC) released a report entitled Choice Constrained, Segregation Maintained: Using Federal Tax Credits to Provide Affordable Housing, finding that a federal program that produces affordable housing, the federal Low Income Housing Tax Credit (LIHTC) program, perpetuates residential segregation.

The premise of the study is that where affordable housing is located matters. The location of affordable housing can determine whether families have access to a variety of areas, including low-poverty communities that may offer greater employment opportunities, high-quality educational opportunities, and other important amenities. The study examined the location of low-income housing units based on the poverty concentration and racial composition of neighborhoods.

From January 1, 1998 to December 31, 2007, the New York State Division of Housing and Community Renewal (DHCR), the New York State Housing Finance Agency (HFA), and the New York City Housing Preservation and Development (HPD) collectively issued tax credits that resulted in over 52,000 units of affordable rental housing being placed into service in the New York City region. In the study, the region was defined as including New York City and seven surrounding New York Counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester.

Some of the key findings contained in the report include:

• Most LIHTC affordable housing units (71%) were located in areas of high or extreme poverty.

• Most LIHTC affordable housing units (77%) were located in minority neighborhoods.

• Nearly half of all LIHTC affordable housing units in suburban areas were elderly units. 63% of the elderly units were located in low-poverty areas, while only 25% of the family units were located in these areas. Similarly, 74% of the suburban elderly units were developed in white or predominantly white areas, while only 31% of family units were located in these areas.

• LIHTC affordable housing units were concentrated in poor and minority neighborhoods regardless of whether they involved the rehabilitation or new construction of multifamily housing.

The report includes more than a dozen recommended action steps to be taken by the U.S. Department of Treasury and three New York tax credit allocation agencies. These recommendations are aimed at ensuring that the LIHTC program operates in a manner that:

1. Complies with the federal Fair Housing Act and the duty to affirmatively further fair housing;

2. Expands housing choices available to lower-income and minority family households;

3. Deconcentrates poverty and reduces residential racial segregation;

4. Identifies and eliminates barriers to developing LIHTC housing for families in low-poverty areas; and

5. Provides incentives to promote the development of mixed-income housing.

In commenting on the study, FHJC President Gene Capello stated, “This well-researched and timely report shows us that legislation alone will not remedy residential segregation. It will take leadership and the will of those we entrust in government to step forward and execute their duties to ensure that programs comply with civil rights mandates and expand opportunity for all.” FHJC Executive Director Kumiki Gibson added, “This report underscores why it is important for government agencies to take their duty to affirmatively further fair housing seriously. Had they done so over the decade studied in our report, the LIHTC program could have expanded housing choices for lower-income families and contributed to a reduction in residential segregation. Our hope is that, going forward, these agencies will take steps to ensure that tax credits are used to create more mixed-income housing opportunities in low-poverty areas.”

The report was authored by Simon Kawitzky, Fred Freiberg, Diane L. Houk, and Salimah Hankins. Funding for the study was provided by the Ford Foundation. The full report is available on the FHJC website at www.fairhousingjustice.org/resources/publications.

About FHJC: The mission of the FHJC is to challenge systemic housing discrimination, promote open, accessible, and inclusive communities, and strengthen enforcement of fair housing laws. The FHJC assists individuals who encounter illegal housing discrimination by providing counseling on fair housing rights, investigative assistance, and referrals to administrative agencies and cooperating attorneys. Individuals who need assistance with housing discrimination complaints are encouraged to call the FHJC at (212) 400-8201.