Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?
(2005) Authors: Ingrid Gould Ellen, Amy Ellen Schwartz, Ioan Voicu, and Michael H. Schill Research Question: How does subsidized rental housing affect nearby property values? Results: In this study, the researchers compared sales prices of New York City homes located near federally subsidized rental housing to sales prices of similar homes located in the same neighborhood, but farther from subsidized housing. Using New York City property sales and property tax assessment data, they found that on average, subsidized housing is associated with a small increase in neighboring property values. Benefits are larger in more distressed neighborhoods. In the case of city-assisted housing, the resulting increase in property tax revenue exceeded the cost of the subsidies provided by the city. Broken down by program, LIHTC and Section 202 projects both affect nearby property values positively, with LIHTC developments conferring the larger benefit. Section 8 and public housing projects both affect
Few communities welcome federally subsidized rental housing, with one of the most commonly voiced fears being reductions in property values. Yet there is little empirical evidence that subsidized housing depresses neighborhood property values. This paper estimates and compares the neighborhood impacts of a broad range of federally subsidized rental housing programs, using rich data for New York City and a difference-in-difference specification of a hedonic regression model. We find that federally subsidized developments have not typically led to reductions in property values and have, in fact, led to increases in some cases. Impacts are highly sensitive to scale, though patterns vary across programs.
