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Researchers studied what happens to property values when affordable housing is added in neighbourhoods like this one in Alexandria, Virginia.
Does living near affordable housing boost property values or lower them? Christina Stacy and Christopher Davis, who are based at the Urban Institute in the United States, reviewed existing studies on the subject. Some of the studies found that affordable housing brought down property values in neighbourhoods with higher priced homes. Others founds that it depended on the kind of affordable housing that was added. The researchers decided to investigate the question themselves.
Their study looked at affordable housing developments in Alexandria, Virginia. Alexandria was a good place to study because many different kinds of affordable housing have been added to the city’s housing stock.
Some of the new affordable homes were intended for people with low and no incomes. Others were intended for people with higher incomes but, in spite of that, couldn’t afford median rent in the private market. As well, some of the new affordable homes were part of larger complexes where most of the units had market rate pricing. Others were in buildings where all of the homes were affordable.
Alexandria was also selected because some neighbourhoods have high priced homes and some have lower prices. In addition, there was 20 years of data about housing sales and the affordable housing that had been added during that time.
Stacy and Davis found that adding affordable housing boosted surrounding home values. This was the case in neighbourhoods with higher priced homes and ones with lower priced homes.
Housing developments where ALL the homes were affordable? They boosted surrounding house values more than when the affordable homes were part of a mixed income development.
All of the results are statistically significant and more definite than the earlier studies that gave rise to this research. What’s going on? Stacy and Davis suggest that Alexandria’s strong leadership and policy direction could be a factor.
The findings in this study are a boost to people who are seeking to build more affordable housing, ?? regardless of where they live. Although this study is specific to Alexandria, it will be of interest to groups confronted with the claim that affordable housing lowers property values.
The study also offers a viable methodology that could be tested in other locations. Local leaders who are working to add more affordable housing might look toward Alexandria’s policies for inspiration.
You can read the full study results at the Urban Institute: Assessing the Impact of Affordable Housing on Nearby Property Values in Alexandria, Virginia