The New York Times recently ran an article which was very thoroughly documented and described how Low Income Housing Tax Credit projects almost always were located in a racially segregated and economically depressed area. The city described was Houston but the facts could apply to almost any United States location. Projects located in depressed census tracts provide much worse outcomes for the residents than those that are not.(Although the sample size of projects located in higher income areas is very small). Here is a link to the article: https://www.nytimes.com/2017/07/02/us/federal-housing-assistance-urban-racial-divides.html?smprod=nytcore-iphone&smid=nytcore-iphone-share
Certainly in some situations building LIHTC projects in economically deprived areas might make sense if part of a major redevelopment project. Most often, the projects are located in those areas because of NIMBYISM or developer decision making.
I am not confident these situations can ever be changed. Higher income neighborhoods will almost never support the construction of low income project in their midst.
A solution to the problem would be something I frequently recommend; an income approach to poverty which provides everyone with a guaranteed minimum income which would be used to support housing as well as other critical programs. New housing would be constructed in response to the demand created by this source of income. FHA would beef up its’ mortgage development program providing a strong vehicle for the construction of new housing. Developers using this program would need to set aside 10% of their units for affordable tenants. Direct construction subsidies would still be available for special needs housing.
We need to overcome the inertia in housing policy caused by the greed of developers of the status quo.