Trulia Report Finds Housing Credit Development has no Significant Impact on Surrounding Home Values
Real Estate aggregator Trulia released a report on November 16 titled, “There Doesn’t Go the Neighborhood: Low-Income Housing Has No Impact on Nearby Home Values.” The report studied the impact of new Low Income Housing Tax Credit (Housing Credit) developments on nearby home values between 1996 and 2006.
The report compared the price per square foot of homes at two separate distances from new Housing Credit developments. Homes within 2,000 feet were considered close to the development for the purpose of the study, and were compared to homes between 2,000 and 4,000 feet from the development. The authors state that using linear distance as the studied factor is common in property value studies and reduces the idiosyncratic impact of neighborhoods.
The authors analyzed the locations of over 3,000 properties located in the 20 least affordable metro areas and found that there was no significant effect on nearby home values resulting from Housing Credit development. Out of the metropolitan areas studied, only two—Boston and Cambridge—showed a negative impact on home values from Housing Credit development, while in one metro area—Denver—Housing Credit development correlated with an increase in home value.
The article concludes, “The bottom line for NIMBYs who fear that property values will take a hit when a low-income housing project locates nearby is that their anxiety is largely unfounded – at least in cities where housing is either expensive or in short supply.”