Affordable Housing Can Lift Nearby Home Values
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A new Urban Institute study shows that for one city, property values in above- and below-median-income areas rose slightly when affordable housing was built nearby.
Stable, affordable housing can benefit people with low incomes while also boosting local economies, according to a new report from the Urban Institute.
Alexandria, Virginia, a city of about 158,000 residents in the Washington, D.C. area, lost 78% of its market-rate affordable units between 2000 and 2020, according to the study. The group predicts that the city will need an additional 13,600 housing units to accommodate household growth from 2015 to 2030, mostly for middle- and low-income households.
Affordable housing can reduce homelessness, lift people out of poverty, improve health outcomes and youth educational outcomes, long-term earnings and reduce the possibility of adult incarceration, the report states.
Regardless of the benefits, property owners who live near proposed affordable housing developments often oppose the projects, and homeowners in Alexandria were no different, according to the report. Residents there worried the affordable housing developments would depreciate the values of their homes.
The Urban Institute found that affordable housing units in Alexandria helped increase property values of homes located within one-sixteenths of a mile of a development. The study showed that affordable housing units in above-median-income census tracts increased in value by 0.06% and in below-median-income tracts by 0.17%.This is contrary to prior findings that show affordable housing in high-income neighborhoods reduces nearby property values, the report says.
The reason individuals often oppose affordable housing developments is their perception that they will lower nearby property values, the report says. However, the analysis of Alexandria shows that affordable housing developments have a small but statistically significant increase in value of nearby homes.
The Urban Institute's analysis uses an analytic sample that includes properties sold multiple times between 2000 and 2020 within and outside Alexandria that were also within 1 mile of an affordable housing development.
For more information from the Urban Institute report click here.
Andre Claudio is an assistant editor at Route Fifty.
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