Lan Deng

The Emerging Housing Policy Framework in China

This article describes the emerging housing policy framework in China, which includes three major affordable housing programs and a heavily regulated housing finance sector. The three programs are the Economical and Comfortable Housing (ECH) program, the Housing Provident Fund (HPF) program, and the Cheap Rental Housing (CRH) program. For each program, the authors examine how it works and whether it has been effective in achieving its policy objectives. They also describe the characteristics of China’s newly developed mortgage market and present some examples of the recent government efforts to regulate mortgage lending and to address concerns about potential real estate bubbles.

Comparing the Effects of Housing Vouchers and Low-Income Housing Tax Credits on Neighborhood Integration and School Quality

This study compares the effects of housing vouchers and low-income housing tax credits (LIHTC) on neighborhood integration and school quality in six metropolitan areas. The study shows that program...This study compares the effects of housing vouchers and low-income housing tax credits (LIHTC) on neighborhood integration and school quality in six metropolitan areas. The study shows that program performance varies according to government policy choices and the local market environment. New York and Boston are the only two areas where vouchers clearly do better than LIHTC, a result of LIHTCs targeting of distressed neighborhoods and the dispersion of vouchers. In Atlanta and Miami, LIHTCs emphasis on new construction has brought more assisted families to middle-income suburban neighborhoods. By contrast, the persistent racial segregation in Cleveland and a regionwide housing shortage in San Jose have diminished the economic and educational prospects for both programs.

The cost‐effectiveness of the low‐income housing tax credit relative to vouchers: Evidence from six metropolitan areas

Abstract How expensive is the Low‐Income Housing Tax Credit (LIHTC) program relative to vouchers? Are there any market conditions under which the supply‐based LIHTC could be more cost‐effective than demand‐based vouchers? This article examines these questions in six metropolitan areas—Boston, New York, San Jose (CA), Atlanta, Cleveland, and Miami. Controlling for family income and unit size, I compare the development subsidies of new‐construction LIHTC projects with the alternative 20‐year voucher cost in each area. In general, the LIHTC is found to be more expensive than vouchers. The premium, however, varies significantly by voucher payment standard and local housing market. Assuming a payment standard of 100 percent of fair market rent, the LIHTC is only 2 percent more expensive than vouchers in San Jose, but more than twice as expensive as vouchers in Atlanta. Many factors account for these regional variations. This study emphasizes two: local market conditions and program administration.

THE EXTERNAL NEIGHBORHOOD EFFECTS OF LOW‐INCOME HOUSING TAX CREDIT PROJECTS BUILT BY THREE SECTORS

ABSTRACT: This study examines the external neighborhood effects of Low-Income Housing Tax Credit (LIHTC) Projects built in Santa Clara County, California from 1987 to 2000. Three types of developers have built LIHTC projects in this area: nonprofit, for-profit, and a county public housing authority. Using a difference-in-difference hedonic regression approach, this study finds that almost all the LIHTC projects examined have generated significantly positive impacts on nearby property value. In particular, the study also finds that most nonprofit projects have delivered benefits similar to those of for-profit projects. Yet projects built by some of the largest nonprofits and the county housing authority have generated the greatest neighborhood impacts. Low-income neighborhoods have also benefited more from LIHTC developments than other types of neighborhoods.

Financing Affordable Housing Through Compulsory Saving: The Two-Decade Experience of Housing Provident Fund in China

Housing Provident Fund (HPF), a compulsory saving scheme providing self-funded housing credit, is a significant provider of housing finance in several emerging economies. The Chinese HPF program constitutes the largest social housing finance program in the world. Yet, very few studies have examined it. This paper documents the history of Chinas HPF program, in particular, how it has evolved from a local experiment to a prominent national housing program. It then examines the programs management structure and the role of HPF lending in meeting Chinas housing finance needs. The paper also compares Chinas HPF experience with the HPF practices in other countries. Finally, the paper examines the challenges Chinas HPF program faces today and the efforts to address them. The paper concludes by discussing some of the broader lessons that can be learned from Chinas HPF experience.

Low-Income Housing Tax Credit Developments and Neighborhood Change: A Case Study of Miami-Dade County

This study examines the changes in neighborhoods hosting the Low-Income Housing Tax Credit (LIHTC) projects in Miami-Dade County between the 1990 and 2000 censuses. The study applies a cluster analysis to identify neighborhoods that are similar to LIHTC neighborhoods. It then compares changes in LIHTC neighborhoods with the median changes experienced by similar neighborhoods without the LIHTC in eight selected indicators. The study finds that over half of the LIHTC neighborhoods have experienced more positive changes than their control groups; however, the effects vary by neighborhood context. Black high-poverty neighborhoods receiving the LIHTC investment have experienced the most positive changes, while changes in middle-class neighborhoods have been the most negative. Further case studies show that LIHTC is successful at promoting neighborhood revitalization when it is strategically concentrated and part of cumulative efforts. These case studies, however, also raise concerns about the over-concentration of LIHTC units in vulnerable suburban neighborhoods.

Planning for Evaluation Using Regression Discontinuity to Evaluate Targeted Place-Based Programs

This article introduces a quasi-experimental research design known as regression discontinuity (RD) to the planning community. The RD design assigns program participants to a treatment or a control group based on certain cutoff criteria. We argue that the RD design can be especially useful in evaluating targeted place-based programs. The article describes how RD works and compares it with other commonly used evaluation techniques. We also present an example to illustrate its use. The article concludes with a discussion of how some existing place-based programs, with minor modification, could be evaluated by the RD design.

Market development, state intervention, and the dynamics of new housing investment in China

ABSTRACT This article examines the temporal and spatial variations in the dynamics of China’s new housing investment and how they were shaped by the development of private markets and persistent state interventions. Using panel data collected for 35 cities from 1999 to 2013, it measures the price elasticity of housing investment to see how housing production responded to housing price changes. It finds that the price elasticity was about 5 from 1999 to 2008, in the range of what studies of market economies have reported. This shows that China succeeded in establishing a market-driven housing supply system. Price elasticity turned negative from 2009 to 2011, indicating a state-driven housing supply system as the Chinese state took unprecedented actions to stimulate the economy in response to the global financial crisis. Elasticity remained negative in 2012 and 2013 but at a reduced scale. Meanwhile, housing investment became much larger after 2008 than before. These changes show that China’s stimulus measures had lasting impacts on the housing industry. Price elasticity is also found to be lower in the eastern region than in the other regions, indicating constraints in the region’s housing production. These findings have important implications in our understanding of Chinese housing markets and housing policies.

Saving Strong Neighborhoods From the Destruction of Mortgage Foreclosures: The Impact of Community-Based Efforts in Detroit, Michigan

Abstract Mortgage foreclosures hit Detroit, Michigan hard between 2005 and 2014, especially in what we define as strong neighborhoods; there, more than one third of homes experienced foreclosure. Before the crisis hit, these selected tracts had largely intact physical environments and higher owner occupancy, household income and property value than the citywide median. In some of them residents worked intensely to abate the neighborhood effects of mortgage foreclosures. This study examines those efforts’ effectiveness. We selected neighborhoods with the most extensive efforts, as measured, for instance, by creation of community-based plans and applications for grants, and we conducted interviews and field observations to examine those efforts. To assess strengthening of neighborhood housing markets, we applied a modified adjusted interrupted time-series approach to evaluate changes in prices as one measure of neighborhood change. We found that strong resident initiative supported by community development organizations and external assistance led to increased neighborhood housing prices, compared with comparable neighborhoods. However, when initiative, context, and support were weaker, community-based efforts could not prevent considerable decline.

From Public Housing to Joint Ventures: Lessons from the U.S. Housing Policy Development

Almost eight decades have passed since the U.S. government first established its role in helping low-income families’ housing consumption. The government efforts began with the public housing program, created in response to the housing austerity caused by the Great Depression. However, over the years the U.S. government has moved away from the public housing model. Instead, it has established a housing policy framework that features the participation of the private sector in affordable housing production, albeit with significant public assistance. Meanwhile, a greater emphasis has been placed on providing quality neighborhoods and expanding socioeconomic opportunities to low-income families. By examining the successes and failures in U.S. housing policy development, this paper will offer suggestions on what emerging economies like China can learn from the U.S. experience, given their ambitious efforts in expanding affordable housing provision to low-income families.