Terner Center Study Finds Economic Mobility and Educational Success for Housing Credit Tenants

The Terner Center for Housing Innovations at UC Berkley (The Terner Center), in partnership with the California Community Reinvestment Corporation (CCRC), recently highlighted the impact living in affordable housing has on residents’ economic mobility and other positive outcomes. Limiting its research to Low Income Housing Tax Credit (Housing Credit) properties for families, and considering properties located in both lower and higher poverty neighborhoods, The Terner Center examined the role the Housing Credit plays in stabilizing low-income families through more than 250 resident surveys across 18 California Housing Credit properties.

The study’s key findings show that living in stable Housing Credit properties leads to three major outcomes for residents: greater economic mobility, improved educational performance among children, and generally higher quality neighborhoods.

  • The Terner Center found almost 60 percent of working-age Housing Credit residents were employed, and the vast majority of those unemployed were either in school or a stay-at-home parent, retired, or disabled. The most common occupations reported by the respondents did not pay enough to allow their families to afford housing in the private market.
  • In addition to greater economic mobility for adults, The Terner Center investigated the link between affordable housing and children’s educational outcomes. Among college-aged residents, nearly 60 percent were enrolled in college, and more than half were enrolled in a four-year university. The majority of respondents attributed the high education rates and their children’s success to the housing stability the Housing Credit properties provide. Overall, parents attributed resident services with their children’s performance at school (66 percent), orienting their children toward college (72 percent), improving behavior (93 percent), and building self-confidence (64 percent).
  • The study found neighborhood characteristics were not as important as other factors to residents when making the decision to live in a Housing Credit unit; 80 percent of respondents said affordability and unit size were the most important factors. However, they did find residents were strongly attached to their current homes and had an aversion to moving away despite any neighborhood or community shortcomings.

Prior to moving into a Housing Credit property, residents reported they experienced rent burdens and unpredictable rent increases, overcrowding, slum landlords, and unsafe and low-quality homes. One in five respondents reported they had experienced homelessness before moving into their current Housing Credit apartment, and another one fifth said they previously had been evicted or forced to leave a residence due to unsustainable rent increases (see figure 2). Half of all respondents said they were consistently worried about paying their rent prior to moving into a Housing Credit apartment, and 40 percent were either worried about paying for food or skipped meals to meet their high housing costs. However, according to the study, almost 90 percent of survey respondents reported their housing situation had improved since moving into a Housing Credit property.

The research found that some tenants are still cost burdened; with approximately 41 percent of Housing Credit residents surveyed paying more than 30 percent of their income on rent, and 16 percent are paying more than 50 percent of their income on rent.

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