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Economy

Which Neighborhoods Win by Building Affordable Housing?

“Affordable housing proximity may be viewed as an amenity in some areas, but a disamenity in others.”
Affordable housing in Washington D.C., circa 2004.
Affordable housing in Washington D.C., circa 2004. AP Photo/Manuel Balce Ceneta

Building affordable housing in low-poverty neighborhoods can greatly improve the lives of poor households who get to live there without compromising developers’ bottom lines. But in which neighborhoods does affordable housing produce the greatest good, economically speaking?

A recent working paper published in the National Bureau of Economic Research takes a stab at that question. In it, the Stanford University economists Rebecca Diamond and Timothy McQuade evaluate the spillover costs and benefits of housing projects funded through the Low Income Housing Tax Credit in 129 U.S. counties across 15 states, highlighted in the map below: