Affordable Housing and Tax Credit Developments NationallyAffordable housing programs help families – and pay for themselves, studies say

May 15, 2015by George Danneman

New studies show the positive long-term effects of government programs that support low-income families by providing affordable housing. That is not a surprise to those of us who have worked within the field for years. But here’s an added bonus – those same studies suggest these programs pay for themselves.

These are important findings, especially now. So says Jason Furman, chairman of the White House Council of Economic Advisers, writing in The New York Times: “Since the War on Poverty in the 1960s, skeptics have argued that even if these programs provide temporary relief, the only long-term impact is increased dependency — witness, they say, the persistent lack of mobility in places like inner-city Baltimore.”

But new research from Harvard economists Raj Chetty, Nathaniel Hendren and Lawrence F. Katz and the National Bureau of Economic Research suggests that there are specific and positive long-term benefits, especially for the children of low-income families who receive benefits like affordable housing.

The study tracked results from a ‘90s housing assistance program called “Consider Moving to Opportunity,” where low-income families were given assistance to move from high-poverty neighborhoods to lower-poverty neighborhoods.

The study concludes: “We find that moving to a lower-poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-poverty area when they are less than 13 years old have an annual income that is $3,477 (31%) higher on average relative to a mean of $11,270 in the control group in their mid-twenties.”

And that’s where the programs pay for themselves. Researchers found the program costs of “Consider Moving to Opportunity” were completely covered by the additional tax revenue the government would collect from these higher earnings.

As Furman says, investing in families works. And providing them with affordable housing is a basic first step that leads toward stable neighborhoods and a stronger nation.

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