In a survey released this morning by Scioto Analysis, the majority of economists agreed that a tax credit for low-income housing developers would significantly lower housing prices for low-income renters.
This policy has been a point of contention between the Ohio House of Representatives and the Ohio Senate. House lawmakers supported spending $500 million on tax credits for low-income housing developers in their most recent budget proposal, but the Senate removed this item.
Among economists who agreed, questions remained about whether this policy would be an efficient use of government resources. As Jonathan Andreas of Bluffton University wrote, “housing costs (particularly for starter homes) are higher now than they have been historically because of a supply problem… I doubt this is the most cost-effective way to increase the supply of housing, but the best way is often politically infeasible and this should increase the supply of housing.”
Charles Kroncke from Mount St. Joseph university strongly disagreed that this policy would lower prices for low-income renters, writing “only if government mandates specific rental prices. Even then, I would expect developers to have a preference for market priced developments.”
Economist opinions were mixed on the prospects of these subsidies for economic growth or reducing income inequality.
The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists. Individual responses to all surveys can be found here.