Oftentimes, a large concern of homeowners living near an affordable housing property is the impact the development will have on their property value and on the neighborhood. Several studies have been done to see what, if any, effects affordable housing has on property value, crime rate, and more.
Define “Affordable Housing”
Many people assume the term affordable housing refers to the physical appearance of the property. However, the Department of Housing and Urban Development defines affordable housing as “Housing on which the occupant is paying no more than 30% of gross income for housing costs, including utilities.” Oftentimes, you won’t be able to tell if a property is a HUD property by its appearance.
A study done by the National Low Income Housing Coalition shows a shortage of affordable housing across the country, and specifically in Nebraska. “Many of these households are severely cost burdened, spending more than half of their income on housing. Severely cost burdened poor households are more likely than other renters to sacrifice other necessities like healthy food and healthcare to pay the rent, and to experience unstable housing situations like evictions.” The graphic below shows low income statistics specific to Nebraska.
A review of literature by the Urban Studies Program at San Francisco State University shows that 13/14 studies that examined the impact of proximity to affordable housing on property values have found no significant negative effect. Furthermore, research shows that affordable housing, in some cases, can improve property value. HUD’s Low-Income Housing Tax Credits (LIHTC) database showed that producing affordable housing in distressed neighborhoods positively impacts the surrounding area in terms of modest property value gains and increased safety.
A study by Trulia was conducted in 2016 to show the little to no impact affordable housing has on property values. They noted that, “In the nation’s 20 least affordable markets, our analysis of 3,083 low-income housing projects from 1996 to 2006 found no significant effect on home values located near a low-income housing project, with a few exceptions.”
We talked about the impact of affordable housing on property value, but does it impact neighborhood crime rates? Many fears around affordable housing increasing the neighborhood’s crime rates are based on emotional fear rather than factual arguments. Research shows that when affordable units occur in small quantities (typically 50 units or less), there is no impact on neighborhood crime. Additionally, a study by the Minneapolis Center for Urban and Regional Affairs found that the number of calls made to the police significantly declined from properties that converted to affordable housing.
So does affordable housing negatively impact neighborhoods? It is important to note that this is not a simple yes or no question. While there are various effects on property values and crime rates due to different characteristics of affordable housing properties and their neighborhoods, a majority of studies show the same thing: affordable housing does not typically decrease property value or increase crime rate.
Metonic believes that every person, regardless of age or income, deserves to reside in the neighborhood they want to live in.
Department of Housing and Urban Development: Glossary of Terms to Affordable Housing. (2011, August 18). Retrieved 2020, from https://archives.hud.gov/local/nv/goodstories/2006-04-06glos.cfm
Goetz, E., H.K. Lam, and A. Heitlinger. 1996. There Goes the Neighborhood? The Impact of Subsidized Multi-Family Housing on Urban Neighborhoods. Working Paper 96-1. Minneapolis, MN: Center for Urban Regional Affaris.
Housing Needs by State – Nebraska. (2020). Retrieved 2020, from https://nlihc.org/housing-needs-by-state/nebraska
Nguyen, M. T. (2005). Does Affordable Housing Detrimentally Affect Property Values? A Review of the Literature. Journal of Planning Literature, 20(1), 15–26. https://doi.org/10.1177/ 0885412205277069
Office of Policy Development and Research: Low-Income Housing Tax Credits. (2020, May 6). Retrieved 2020, from https://www.huduser.gov/portal/datasets/lihtc.html
Young, C. (2016, November 16). There Doesn’t Go the Neighborhood: Low-Income Housing Has No Impact on Nearby Home Values. Retrieved 2020, from https://www.trulia.com/research/low-income-housing/