A tale of energy-burdened cities: connecting the low-income housing tax credit to energy insecurity

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University of Delaware
In the United States, urban areas are one of the most energy-insecure spaces with energy-cost-to-income ratios (i.e. energy burdens) as high as 25%. This is more than twice the 10% standard energy insecurity studies use to distinguish highly energy-burdened households. Impoverished, urban areas tend to have residents that live in older and less energy-efficient housing that requires more energy - and thus money - to operate. Examining financial and infrastructural variables of energy insecurity, this dissertation takes a deeper look at the exogenous variation in infrastructure created by the Low-Income Housing Tax Credit (LIHTC): a credit that incentivizes housing developers to build or renovate housing for low-income renters. Specifically, a two-way fixed effects regression model is used to investigate the impact of LIHTC housing supply on the energy burdens of urban PUMAs and ConsPUMAs. The analysis found that PUMAs with more LIHTC units, especially newly-built units, had a significantly negative relationship with energy cost and energy burden in multiple model specifications. Additionally, the analysis also found strong evidence that infrastructure-centered programs like the Weatherization Assistance Program have a significantly negative relationship with energy cost and burden.
Energy insecurity, Energy poverty, Housing, Low-income, Urban areas