“I’ve worked hard for many years, and my home is one of my most important investments! Will new units of affordable housing nearby affect the value of my home, or hinder my ability to sell?”
Very broadly, this is what the research says:
Vacant lots, sub-standard housing and abandoned homes are a serious problem that hurts property values. But well-run affordable or supportive housing developments tend to have no impact on the value of local properties. Instead, good looking, functional homes make neighbourhoods more desirable and usually stabilize or increase property values.
There are of course horror stories. In the past, some jurisdictions designed projects that were large, ugly, poorly built and clustered in a way that set them apart from the surrounding community. These projects had the effect of ghettoizing people in poverty and reinforced negative stigmas. As well, not all such housing projects were well-run or well-managed. Some of these projects became difficult neighbours and did impact housing values.
But much has been learned, and contemporary practices emphasize the need for good and responsible design that will blend well into an existing neighbourhood. There is also a push to design projects where units of affordable housing are built alongside regular market rental units (Mixed Market Housing).
To learn more, please look at some of the following studies. At the top of the list is a study done here in Edmonton.
RESEARCH STUDIES: Examining the Relationship between Affordable Housing and Property Values:
REALTORS Association of Edmonton. (2013, July 15). How do changes to my neighbourhood affect my property values?” #yeg #yegre. [Blog post], RAEinfo Official blog of the REALITORS Association of Edmonton. Realtors Association of Edmonton. (2011). REALTOR® Political Action.
Albright, L., Derickson, E. S., & Massey, D. S. (2013). Do Affordable Housing Projects Harm Suburban Communities? Crime, Property Values, and Taxes in Mount Laurel, NJ. City & Community: American Sociology Association, 12(2), 89-112.
ASU Stardust Centre for Affordable Homes and the Family. (2008). How does Affordable Housing Affect Surrounding Property Values? Housing Research Synthesis Project Research Brief No. 1: Arizona State University, Phoenix Arizona.
Brunes, F., Hermansson, C., Song, H.-S., & Wilhelmsson, M. (2016). NIMBYs for the rich and YIMBYs for the poor: Analyzing the property price effects of infill development. Working Paper Series, Department of Real Estate and Construction Management & Centre for Banking and Finance, 16(2), 1-41
Centre for Local, State, and Urban Policy (CLOSUP). (2009). Assessing Changes in Neighborhoods Hosting the Low- Income Housing Tax Credit Projects. Working Paper Series No. 8, 48109-2069. Ann Arbor, MI, Gerard R. Ford School of Public Policy, University of Michigan: Deng, L
Centre for Local, State, and Urban Policy (CLOSUP). (2009). Has Competition Led to Healthier Neighborhood Effects? A study of Low-Income Housing Tax Credit Projects Built by Three Sector. Working Paper Series No.19, 48109- 2069. Ann Arbor, MI, Gerard R. Ford School of Public Policy, University of Michigan: Deng, L
Citizens’ Housing and Planning Association. (2012). Overcoming Restrictive Zoning for Affordable Housing in Five States: Observations for Massachusetts. Boston, Massachusetts: Bratt, R. G., & Vladeck, A.
Daily Real Estate News. (2016, February, 19). How Affordable Housing Helps Companies. REALTOR® Magazine Official Magazine of the National Association of Realtors.
Deng, L. (2011). The External Neighbourhood Effects of Low-Income Housing Tax Credit Projects Built By Three Sectors. Journal of Urban Affairs, 33(2), 143-166.
Ding, C., & Knaap, G.-‐J. (2003). Property Values in Inner-‐City Neighborhoods: The effects of Homeownership, Housing Investment, and Economic Development. Housing Policy Debate, Fannie Mae Foundation,13 (4), 701-727.
Ellen, I. G., Schill, M. H., Schwartz, A.E., & Voicu, I. (2007). Does Federally Subsidized Rental Housing Depress Neighbourhood Property Values? Journal of Policy Analysis and Management, 26, 257-280.
Ezzet-Lofstrom, R., & Murdoch, J. C. (2006). The Effect of Low Income Housing Tax Credit Units on Residential Property Values in Dallas County. Williams Review, 1(1), 107-124.
Galster, G. (2002). A Review of Existing Research on the Effects of Federally Assisted Housing Programs on Neighboring Residential Property Values. Report to the National Association of Realtors, September.
King, N. (2015, December 21). Property Value in Low-Income Housing Debate. The Market Place, Wealth and Poverty.
Lens, M.C. (2013). The Limits of Housing Investment as a Neighborhood Revitalization Tool: Crime in New York City. Journal of the American Planning Association, 79(3), 211-221.
Lyons, R.F., & Loveridge, S. (1993). An Hedonic Estimation of the Effect of Federally Subsidized Housing on Nearby Residential Property Values .Staff Paper P93-6. Minnesota: University of Minnesota, Department of Applied Economics.
Maxfield Research Inc. (2014). An Update Analysis of the Relationship between Affordable Family Rental Housing and Home Values in the Twin Cities, Prepared for Family Housing Fund Minneapolis, Minnesota. Minneapolis, Minnesota: Maxfield Research Inc.
MIT Centre for Real Estate Housing Affordability Initiative. (2005). Effects of Mixed-Income, Multi-Family Rental Housing Developments on Single-Family Housing Values. Boston MA: Pollakowski, H.O., Ritchay, D., & Weinrobe, Z.
National Realtors Association (US). ( 2016, March). Effects of Mixed-Income, Multi-Family Rental Housing Developments on Single-Family Housing Values.
Nguyen, M. T. (2005). Does Affordable Housing Detrimentally Affect Property Values? A Review of the Literature. Journal of Planning Literature, 20, 15-26.
Santiago, A. M., Galster, G. C., & Tatian, P. (2001). Assessing the Property Value Impacts of the Dispersed Housing Subsidy Program in Denver. Journal of Policy Analysis and Management, 20(1), 65-88.
The Federal Reserve Bank of Kansas Economic Research Department. (2011). Low-Income Housing Tax Credit Developments and Neighborhood Property Conditions. Research Working Paper 11-10. Kansas City, Missouri: Edmiston, K. D.
Woo, A., Joh, K., & Van Zandt, S. (2015). Unpacking the impacts of the Low-Income Housing Tax Credit Program on Nearby Property Values. Urban Studies, DOI 10.1177/0042098015593448.