One of the great arguments of the NIMBY (Not In My Back Yard) crowd is the concern that the introduction of low-income housing will deflate home values in neighborhoods striving for property wealth. However, a new analysis from Trulia suggests that this does not occur.
“In the nation’s 20 least affordable housing markets, low-income housing built during a 10-year span shows no effect on nearby home values,” said Cheryl Young, senior economist at Trulia. “Some of the nation’s least affordable markets are also ground zero for the fight against building affordable housing—which opponents say, among other things, depreciates nearby home values. Resistance to affordable housing development has surfaced in tight housing markets across the country such as San Francisco, New York, and Seattle.”
For its data analysis, Trulia defined “low-income housing” as developments funded through the federal Low-Income Housing Tax Credit program and covered 3,083 low-income housing projects built between 1996 and 2006. Of the 20 markets examined for this study, only Denver registered a positive effect in terms of price per square foot after a project was completed, while Boston and its neighboring city Cambridge were the only markets where low-income housing projects had a negative effect on nearby homes in terms of price per square foot.
“There is no statistically significant difference in price per square foot when comparing properties near a low-income housing project and those farther away when examining projects across all 20 metros,” said Young. “Likewise, at the metro level, the majority of markets yield no significant difference in prices between the inner and outer ring after a project is completed. However, a few housing markets revealed significant differences in price per square foot near low-income housing projects after they were placed into service.”
