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The Impact of Regional Government Structure on the Concentration and Supply of Affordable Housing Author: Andrew Aurand Dissertation School: University of Pittsburgh Pages: 45 Publication Date: 2004 Availability: Access Number: 5003 Abstract: The purpose of this research is to test the relationship between a metropolitan region's political fragmentation and the concentration and supply of affordable rental units for extremely low-income renter households. Public choice theory provides a foundation from which to predict that a fragmented government structure in a metropolitan region provides incentives to local municipalities to limit their redistributive policies that shift resources from higher income households to households of limited resources (Peterson, 1981). Given municipalities' desire to maintain an adequate tax base, they will attempt to attract higher income residents rather than focus on the provision of house for low-income households. A municipality's tax base can be protected of low-income housing, particularly housing for the lowest income population, is not within its jurisdiction. Using a measure of political fragmentation called the Metropolitan Power Diffusion Index (MPDI) (Miller, 2002), two hypotheses concerning the concentration and supply of rental housing for extremely low-income households are tested. First, the research tests the hypothesis that greater power diffusion in a metropolitan region is associated with increased segregation of affordable rental housing. Given each municipality’s desire to compete for an adequate tax base from which to provide a high level of services at minimal cost to the individual, housing for extremely low-income households will be segregated into weaker or less appealing neighborhoods. Data from the 2000 Census and Miller's (2002) measure of power diffusion do not support this hypothesis when other variables such as housing characteristics, population, and economic characteristics are added to the model. While the relationship is significant below the .05 level and positive in a simple regression model, it becomes insignificant with a slightly negative coefficient when the other controlling variables are added. The second hypothesis is that there is a negative association between power diffusion and the relative supply f affordable rental units. High diffusion of power is expected to be associated with a smaller relative supply of affordable rental units as competition among fragmented municipalities for an adequate tax base entices them, individually, to limit low-income housing within their boundaries. The analyses show that there is a statistically significant relationship below the .05 level, however, in the opposite direction than public choice theory might predict. Power diffusion appears to be positively associated with the relative supply of affordable rental units. These analyses support Hamilton's (1978) findings that a stronger concentration of zoning powers may increase housing prices, while fragmented zoning powers may reduce prices. Power diffusion or political fragmentation does not explain the segregation of affordable rental units and appears to be associated with an improvement in a region's relative supply of affordable housing. These findings do not support the initial hypotheses. Public choice theory may not provide an adequate foundation to explain the supply and location of affordable housing for extremely low-income households. |
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