By Roland Murphy for AZBEX
We can take yet another arrow out of the NIMBY quiver. A new study has shown clear evidence that publicly subsidized/incentivized low-income housing does not lower surrounding home values in the neighborhood. In fact, it can increase them.
The study examined 508 developments that received Low-Income Housing Tax Credit program funding between 1997 and 2016 and used local property assessments and tax records to examine more than 600,000 nearby residential property sales.
According to the summary article, “We found that, relative to comparable homes in other neighborhoods, average home prices jumped by 10% within a quarter-mile of the first affordable housing development that was built in a neighborhood and 2% within a quarter-mile over a 15-year period or through 2016.”
The study authors checked against existing market trends to ensure the neighborhoods that showed faster price growth had not already been experiencing faster growth before the arrival of the LIHTC developments.
The trend also held true regardless of the income level or racial makeup of the areas being studied.
The findings are particularly valuable because a key point of opposition to new development is the fear from existing homeowners that developing publicly subsidized housing will lower property values, increase crime and generate higher costs for services. Those concerns and associated NIMBYism and neighborhood opposition increase when two or more projects are clustered together.
Unlike past developments that were poorly constructed and maintained and developed the stigmatic association of “The Projects,” LIHTC-funded programs incentivize private developers to create high-quality but affordable communities and to install competent property management.
It should be noted the study did not examine rental prices on surrounding properties, although the authors say they intend to take up the matter in future research.
The initial study was conducted in Chicago, and the authors are currently finishing a follow-up study in Los Angeles to see if the findings will carry over from one urban area to another. They are also studying whether or how the effects on property values change when considerations like the size of the developments, the type of developer and the presence or absence of market-rate units are factored in.
Even if all the data show unequivocally that subsidized housing development raises property values across the board and objectively throttle the often racist and classist myths of decline associated with multifamily development in general and subsidized or incentivized development in particular, there will no doubt be a long road ahead.
The Not-In-My Back-Yard (NIMBY) forces and their allies the Build Absolutely Nothing Anywhere Near Anyone (BANANAs) and Citizens Against Virtually Everything (CAVE) – along with their enablers in various governing and approval bodies – have shown themselves to be immune to facts.
In one recent local argument, a developer countered the myth that multifamily and other dense development places undue strain on infrastructure and resources. Using the city’s own water department billing data, they showed their existing developments used a quarter as much water on a per-unit basis as an average single-family home in the area.
Similar data showing the lower traffic burdens of multifamily developments versus the commercial projects NIMBYs often clamor for in their place has also fallen on intentionally deaf ears.
However, the more objective data points that can be compiled against emotion-based resistance, the greater the likelihood becomes of nudging the needle from opposition to acceptance, at least for those who not swaddled in dogmatic nostalgia and reflexive refusals.