Construction of low-income housing developments has had no consistent impact on the sale prices of nearby homes, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This report includes an analysis of over 220,000 home sales in neighborhoods with low-income housing developments in 26 metro areas across the U.S. from 2007 to 2019.
In 18 of the 26 metro areas studied, no significant difference was detected in the prices of nearby homes sold before and after the construction of a low-income housing development, when compared with similar homes farther from the development. In four of the metro areas with significant differences—Boston, Philadelphia, Washington, D.C. and Charlotte, NC—homes near low-income housing developments sold for more after construction. In the other four metro areas—Chicago, Las Vegas, Phoenix and Warren, MI—homes sold for less.
“Economically integrated neighborhoods—those with low-income housing near homes for middle- and high-income households—are so rare because development of low-income housing often faces strong opposition from neighbors who are concerned that the project will lower their home values. These perceptions have made socio-economic segregation even more pervasive throughout the United States, further exacerbating social, racial, and housing inequalities,” said Redfin senior economist Sheharyar Bokhari.
For homebuyers, economically integrated neighborhoods can be more desirable because they create a more self-contained community where the people who work in the community (teachers, service workers, etc) are able to live in the community.
“Part of President Joe Biden’s housing plan is to expand the Low-Income Housing Tax Credit,” said Bokhari. “If the Biden administration is successful in ‘dramatically increasing the number of new or rehabilitated affordable housing units,’ it will be a big step in the right direction, and in most cases, homeowners near the new affordable housing communities can rest assured that their home values will be unaffected.”
Edited by Maryssa Gordon, Senior Editor, Price of Business Digital Network
