"Not in my backyard" has been the war cry of homeowners who fear low-income housing projects will bring down the price of their most valuable investment, their homes. This fear may seem logical. Property valuers do look at the sale price of comparable homes in a neighborhood when assessing the market price of a property. However, research by the Joint Center of Housing Studies of Harvard University indicates that low-income housing can have positive effects on the the value of surrounding properties.
Increase of Property Values
Contrary to popular belief, affordable or low-income housing can increase the value of surrounding property. For instance, a study of the impact of two low-income housing projects in New York by the Joint Center of Housing Studies of Harvard University analyzed the sale of 300,000 properties and reported a significant increase of the value of properties in the neighborhoods where low-income housing units were built.
Longer Market Times
According to a study of the relationship between affordable family rental housing and home values in the Twin Cities (Minneapolis and Saint Paul) by the Family Housing Fund, the annual per-square-foot price appreciation of surrounding properties experienced a 3-percent increase after low-income housing projects were constructed. The only negative effects the study found were longer market times for properties in some of the low-income housing neighborhoods than those in control areas.
The effect of low-income housing on surrounding properties depends on several variables. According to a research brief by the Housing Research Synthesis Project of the University of Arizona, the effects of low-income housing depend on what type of properties the new housing projects are replacing, the concentration of affordable housing in the neighborhood, the characteristics of the host neighborhood and the quality of management. For instance, the research brief shows that properties within stable, low-poverty neighborhoods are less likely to drop in value when low-income housing is added to the area. The same study shows that when low-income housing projects are part of a revitalization program and replace abandoned or vacant properties, the effect on property values is positive.
- Arizona University Stardust Center: How Does Affordable Housing Affect Surrounding Property Values? [http://stardust.asu.edu/research_resources/research_files/49/90/Download_the_Research_Brief_in_PDF_format.pdf]
- Habitat For Humanity: Why Affordable Housing Does Not Lower Property Values [http://www.habitat.org/how/propertyvalues.aspx]
- Interfaith Housing Center: Common Myths [http://www.interfaithhousingcenter.org/mainpages/21myths.html]
- Joint Center For Housing Studies Of Harvard University: Do Homeownership Programs Increase Property Value in Low Income Neighborhoods? [http://www.jchs.harvard.edu/publications/homeownership/liho01-13.pdf]
- U.S. Department of Housing And Urban Development: Mortgage Credit Analysis for Mortgage Insurance [http://portal.hud.gov/portal/page/portal/HUD]
- Huntsville Housing Authority: Common Myths Associated With Public Housing [http://www.huntsvillehousing.org/NewsDetails.asp?ID=21]