The Conversation: Building subsidized low-income housing actually lifts property values in a neighborhood, contradicting NIMBY concerns

by | Oct 27, 2022 | Stock Market

The Research Brief is a short take about interesting academic work.The big idea Building multiple publicly subsidized low-income housing developments in a neighborhood doesn’t lower the value of other homes in the area—and in fact can even increase their worth, according to a new peer-reviewed study I co-authored.

For the study, we looked at 508 developments financed through the federal Low-Income Housing Tax Credit program and built in the Chicago area from 1997 to 2016. We then examined their influence on more than 600,000 nearby residential sales, using data from local property assessments and tax records. We chose Chicago because of its size, well-established neighborhoods, substantial amount of subsidized housing developments, well-documented racial and ethnic segregation, pockets of persistent and concentrated poverty, and excellent data coverage. While some readers may have pictures of dilapidated buildings in their minds, the projects we looked at were generally well built and well maintained. We found that, relative to comparable homes in other neighborhoods, average home prices jumped by 10% within a quarter-mile of the first affordable housing development that was built in a neighborhood and by 2% within a quarter-mile over a 15-year period or through 2016. To ensure we were isolating the effect of the low-income housing program, we also looked at pre-existing market trends to make sure neighborhoods that showed the faster price growth weren’t already growing at a faster rate before the low-income housing. What was more striking to us, however, is that additional developments in the sam …

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