First, the good news: real estate site Trulia reports that new low-income housing in San Francisco doesn’t seem to negatively affect neighboring property values.
The site identified 90 projects in the city built between 1996 and 2006 that qualified for affordable housing tax credits.
Then, using data drawn from its own hosted listings, it compared the estimated values of homes within 2,000 feet of the affordable site to the value of homes further away in the same neighborhood.
And what they discovered was not much at all. “There is no statistically significant difference in price per square foot” one way or the other, according to the report, released today.
Which is good, because some people will need convincing.In 2007, just as the window closed on the studied time period, California realtors on Trulia’s own Q&A page were debating this very same question.
A few agreed that didn’t make much difference at all. Others said “it depends,” with too many variables involved to make a broad diagnosis.
Others were more blunt. For example: “Overall, it makes properties less attractive,” an Orange County agent replied.
“Of course it does,” one Bay Area realtor added. “Steer clear of these areas.”
“No one wants [low-income projects] near their homes,” another insisted.
But in 2015, Stanford found that some affordable housing projects actually raised property values overall, because the addition of new residents, new housing stock, and quality design improved the neighborhood overall.
A study of studies by the DC-based nonprofit National Housing Conference found that, across a dozen studies conducted between 1993 and 2006, no one ever observed significant depression of home values.
And in a similar study roundup earlier this year, the National Association of Realtors agreed, calling such concerns “a myth” but noting that many “continue to believe it.”
Those findings may be contingent where such projects are likely to appear, though.
Arizona State University in 2008 pointed out that it was “more likely” that BMR housing would cut home values when it was located in “low-poverty, stable neighborhoods.”
And why is that? Brace yourselves, because the answer may be uncomfortable.
A Texas A&M paper from 2015 (which dubbed research on this topic “inconsistent” overall) found that affordable development can run into trouble when it antagonizes people’s prejudices.
If neighbors are convinced that the new housing is going to hurt the neighborhood, they might leave, and that might drive down demand.
Which of course would mean that the problem is not the new residents, but some of the old ones, and their assumptions about low-income housing. Awkward.
Well, at least the data is mostly encouraging. Even if the why behind it leaves something to be desired.
- There Doesn’t Go The Neighborhood [Trulia]
- Property Values, Low Income Housing [Trulia Voices]
- Is Affordable Housing Good For the Neighborhood? [Stanford]
- Don’t Put It Here [Center For Housing Policy]
- Field Guide To Low Income Housing [Association of Realtors]
- Housing Research Synthesis [ASU]
- Unpacking Low Income Housing Property Values [Texas AM]