The Federal Reserve Bank of Dallas has issued a new report titled “Does Low-Income Housing Tax Credit Hurt Nearby Schools?” The report finds:
“”¦adding LIHTC units appears to positively, not negatively, influence a school’s accountability rating in the year the projects open. However, that effect is temporary, largely disappearing after a year. Schools with nearby LIHTC units were classified by income and share of minorities in nearby census blocks. The estimates suggest that the positive influence is largely driven by the housing units constructed in higher-income census areas, while the negative, offsetting data come from LIHTC census block groups with greater minority or lower-income populations. The program’s influence on schools also depends on whether the project is new construction or rehabilitation. New buildings seem to contribute to improvement of academic performance at the nearest elementary schools.”
“The results appear consistent with previous studies indicating that such projects don’t necessarily adversely affect receiving neighborhoods. In fact, they seem to suggest that more-motivated low-income families seek subsidized rental units in mixed-income neighborhoods offering better schools for their well-performing kids. This may dispel some homeowner concerns in higher-income neighborhoods hosting the projects. However, the possibly negative influence of the units in lower-income or higher-minority areas justifies the worries that the multifamily units in neighborhoods densely populated with low-income residents may limit educational opportunities.’
