A Room for One’s Own? The Partisan Allocation of Affordable Housing

Abstract

Millions of Americans live in communities without an adequate supply of affordable housing. The governmental response to the crisis has focused on subsidies to private developers who build below-market housing, with the Low-Income Housing Tax Credit (LIHTC) at the center of this effort. Although federally funded, the LIHTC program grants states wide latitude in distributing billions of dollars of tax credits annually. Do state officials exploit this discretion to channel housing subsidies to geographic constituencies for political ends? Drawing on 20 years of LIHTC administrative data, I test whether electoral support for the state’s governing party predicts the level of tax credit investment directed to an area. The analysis reveals a modest relationship between partisan loyalty and housing investment, conditional on the partisan and institutional contexts. Democratic governors steer tax credits to areas of core support, but only where the governor exercises a high level of control over the state’s LIHTC-allocating agency.