Study Finds Low-Income Housing Has No Effect on Nearby Home Values
Trulia, an online residential real estate site, recently released a study in a blog post entitled, “There Doesn’t Go the Neighborhood: Low-Income Housing Has No Impact on Nearby Home Values.” The study found that low-income housing funded with LIHTCs did not impact the value of nearby homes. The author’s analysis included 3,083 LIHTC sites in 20 of the least affordable housing markets. She examined changes in nearby home values before and after a LIHTC site was completed. She compared the value of homes within 2,000 feet of LIHTC developments to homes located between 2,001 and 4,000 feet from the developments. And she focused on the years of 1996 to 2006, prior to the housing crash. She found that, in most cases, home value changes were similar for homes at both distances, indicating that the low-income housing didn’t influence them.
There were few exceptions. In Boston, homes closest to LIHTC sites experienced a drop in value relative to homes between 2,001 and 4,000 feet away. She suggests that the concentration of LIHTC sites in certain neighborhoods could explain that effect. Conversely, she found a positive impact of LIHTC development on the value of homes less than 2,000 feet away in Denver. She attributes that impact to the high demand for real estate in some neighborhoods in downtown Denver where the LIHTC developments were completed.