Low Income Housing and Property Values

With many markets across the country facing low inventory and affordability issues, more HUD supported housing projects are popping up throughout neighborhoods.  This is leaving some homeowners to believe that the low-income housing may affect their home prices, spurring resistance towards affordable housing development in markets like San Francisco, New York and Seattle. However, a new study done by Trulia proves that it really has had (and will have) no effect on nearby home values.

Based on the analysis of 3,083 homes across 20 of America’s least affordable markets, the study examined changes in nearby home values before and after an affordable housing project was completed. Using home value data from Trulia, the parameters for the studying revolved around location of low-income housing projects as well as completion dates. After reviewing the results, it was concluded that projects built over the last 10 years, have had no negative effects on the surrounding homes. In fact, low-income housing projects in Denver, Colorado actually saw a positive impact in value, in terms of price per square foot.

Some of the more interesting points from the study found that:

  • San Jose, California appeared to be the most aggressive in adding affordable housing units over the past decade (7.81 per 1000 people). While Oakland added the fewest (.52 per 1,000 people)
  •  Denver, Colorado was the only market (of the 20 examined) that saw a positive effect on home prices.
  • Boston and Cambridge, Mass., were the only markets that saw a negative effect on nearby homes prices, which suggest a “region-specific market effect” for these two adjacent metros.

While this information was thoroughly analyzed, the study didn’t seem to address the influence of other possible variables.