HOME Rental Projects: Influence of Financing and Organizational Type on Project Efficiency, Project Location, and Tenants Served

Author: Ellen J. Myerson

Dissertation School: University of California, Berkeley

Abstract:

Enacted in 1992, the HOME Investment Partnership Program works towards increasing the supply of affordable housing through flexible federal housing block grants. The proposed research focuses on rental projects receiving HOME funds through local participating jurisdictions (PJs). The purpose of this dissertation research is to explain the effects of organizational type and sources of financing on project efficiency, project location, and tenants served.

Measuring project efficiency with average unit cost, I will compare cost differentials between nonprofit housing organizations and for-profits controlling for project characteristics such as type, number of units, and state fixed effects. Complimenting this will be an analysis of who is served by HOME rental projects. While nonprofit units may be more costly, they may serve lower-income tenants or different types of families.

The study of location within PJs concerns itself with the poverty rate and concentration of poverty in the chosen Census tract relative to their tracts in the jurisdiction. The main financing issues deal with how different sources of project funding compare in their effect on the number of units produced for a given amount of money, the tenants served, and project location.

Due to the endogeneity of such relationships, instrumental variables is proposed as a method of addressing these concerns. Instruments characterizing the availability of funds across states would serve as valuable instruments. Data collected by HUD’s Cash/Management Information System (C/MIS) covers all HOME rental projects from 1992-1994. Cleaned, matched to U.S. Census tract data, and provided to me by The Urban Institute, this data has been previously analyzed only by The Urban Institute using cross-tabulations. Therefore, this data set has great potential for further exploitation.

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