7 ms·

Low-income housing has no impact on nearby home values (2016)

63 points by gerbler 6y ago

mdoms 6y ago
In the markets with already extremely high demand, arguably markets where value and price are already fully uncoupled (eg bubble markets). An analysis on more "normal" markets would, I suspect, paint a very different picture.
- stormbrew 6y ago
  Ok? But the studied markets are the ones where low income housing is both most needed and also often staunchly opposed by nimbys.
  - remarkEon 6y ago
    Yeah, but that's the point the parent is making. "Most needed" just means "high demand market", and in markets like that it's almost impossible to do anything to upset the trajectory of housing costs - unless we have another 2008-style mortgage crash because of fraud. The lesson to take here is that putting affordable housing in excessively expensive markets might actually be a really smart idea.
    - woah 6y ago
      It tends to be excessively expensive to build in those markets, which is what has led to the excessively high prices in the first place.
  - Waterfall 6y ago
    Needed by whom? Why does someone who can't afford the prices deserve cheap housing downtown?
- netcan 6y ago
  This is the premise. It's not intended to prove the point widely, just in high price/demand markets. Given low inventory and high prices in these tight markets, we set out to uncover how much homeowners really have to fear.
ergocoder 6y ago
Unless they expect low-income people to cause issues, why would housing price decrease? It should increase because the amount of land of normal price decreases. Also, I always joke that you can help lower housing price in the area by causing non-offense nuisance. Walking shirtless and talking gibberish to yourself loudly. It will probably help a little.
- seanmcdirmid 6y ago
  In the USA, many areas have fixed schools you can go to. School performance is a high indicator of housing value, while lower income students generally pull that down...a lot. So you could lower housing prices a lot more effectively by convincing kids in the area to goof off more and not take school seriously.
  - chii 6y ago
    > School performance is a high indicator of housing value but it's not a causal effect - or at least, it's a lot more complicated than a simple causal effect. School performance is affected by budget, which is paid via taxation, as well as resources available from the parents' contributions. Poorer neighbourhoods will obviously have parents contribute less, even if the taxation is the same (which, is highly unlikely as well). The cumulative effect is that poorer people receive a poorer education, which compounds over generations, and causing a negative feedback loop.
    - lotsofpulp 6y ago
      > but it's not a causal effect - or at least, it's a lot more complicated than a simple causal effect. It is a causal effect since parents with more resources (higher paying jobs, higher levels of education, more connections/resources) will be living in higher value housing.
    - burfog 6y ago
      School performance is not much affected by budget. The terrible high schools in DC have really high budgets. The problem lies elsewhere. It's really simple. Kids tend to be like their parents. Parents who raise kids well have a strong preference to be among their own kind. The parent who sits down at night to check homework is nothing like the parent who interrupts homework in favor of entertainment. The parent who enforces discipline is nothing like the parent who lets kids run in gangs. Families are in a bidding war to be with other families that prioritize education. Families without those values will bid lower, and thus be excluded.
OneGuy123 6y ago
This study is useless because it looks at this on only a 10 year span. To go from a "good neighbourhood" to a "bad neighbourhood" takes longer time than just 10 years since more and more houses are build graudually and people move in over longer periods of time until the majority of the population there is low-income.
- Waterfall 6y ago
  Do you have a study where it shows what happens over a longer period of time? The period of 1996-2006 is very suspect too.
- hadlock 6y ago
  Also the study includes San Francisco.... which is going to skew the results significantly
thinkingkong 6y ago
The low income property makes almost no difference. What matters is low income by density. If you spread out low income housing then you get to build it and it has no effect on prices or perceived value. If you had tons of dense blocks of housing, then I could see how youd end up with a deteriorating situation.
bb2018 6y ago
I am in favor of looser zoning laws and generally consider myself a YIMBY. However, I wouldn't say it is good politically to only support local low-income housing conditional on the fact that there is no negatives. I think that is the best policy but also acknowledge that there will be some tradeoffs. As others have said I don't think looking at home values in major cities like Boston or Seattle is that interesting. Cities are used to having very rich areas next to poor ones. I grew up in a town of about 20,000 that had close to no housing that wasn't zoned as single family. As a result, the median income was very high, property taxes stayed extremely low as a percentage (since everyone was contributing a lot), and the schools were considered great despite people not having to pay a lot in taxes. The neighboring town had higher taxes (because the median property value was significantly lower) and the schools were known to be bad. I wish there was more state level funding at the time - but there wasn't and don't think there is now.
- pydry 6y ago
  >However, I wouldn't say it is good politically to only support local low-income housing conditional on the fact that there is no negatives. It obviously isn't but the history of progressive politics demonstrates that ideological purity is a great way of never getting anything real done. E.g. planned Parenthood's murky beginnings, food stamps (buyer of last resort for leftover agricultural produce), schools (training kids to be obedient factory workers). I doubt there are any progressive institutions which aren't partly borne out of an uneasy alliance with some powerful but unethical group whose interests either align or are at least aren't all that badly affected.
netcan 6y ago
Short & medium term effects on real estate prices is only part of the issue. Ultimately, NIMBYism exists for a bunch of reasons... and the reasons don't matter much. Once you have actual organized NIMBYism, you are selling to existing property owners and residents. They have no real reason to "buy" this story. Either low cost housing doesn't affect anything, or it is against their interests. In no scenario does benefit them, so why shouldn't they object... just to be safe? At the least, construction is noisy and unsightly. I think NIMBYism should be accepted as-is. Existing housing has an interest in preventing new housing by default, especially down market of them. That's how organised NIMBYs see it. That's how it plays out in practice. YIMBYs are not going to beat NIMBYs locally. NIMBYism exists. The relevant questions are about how to build despite of NIMBYism, not how to reason with it.
- oehtXRwMkIs 6y ago
  Highly agree. It seems like the only recourse these days is simply overriding NIMBYs at the state level (I think CA is close to this point) when the housing crisis becomes so acute that it becomes politically viable to simply go against the many NIMBYs' wishes at the higher levels.
  - ed25519FUUU 6y ago
    NIMBY is only one face of the coin that makes it difficult for building. Local governments are also extremely satisfied placing a high bureaucratic burden (red tape) on new development. Think of setback laws, environment impact studies, zoning, facade ordinances.
    - oehtXRwMkIs 6y ago
      To my knowledge that's often because local governments are inherently NIMBYs since they only represent locals by definition. Local governments don't listen to potential locals or outsiders. So I don't really agree that local governments and NIMBYs are different sides of a coin. There is a great amount of overlap and personally I suspect any rules that slow development to be NIMBY motivated.
    - 6y ago
Waterfall 6y ago
>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. Talk about cherry picked years. Why don't they analyse from 1998 to 2008 and say the same thing? Did it really take until 2020 to post this? >Of the 20 markets examined, Denver was the only metro area where homes located near low-income housing projects registered a positive effect in terms of price per square foot after a project was completed. And the absence of serious, critical thought. Has trulia never heard of correlation vs causation?
- stepstop 6y ago
  > And the absence of serious, critical thought. Has trulia never heard of correlation vs causation? They probably don’t teach that in data science boot camps
  - Waterfall 6y ago
    They had to cherry pick it. This article is intentionally misleading.
AlexTWithBeard 6y ago
This is an interesting example of a pseudo-research article. It indeed looks like it's using scientific approach to an important problem, but the method is questionable: - why did the authors pick 2,000 feet and 4,000 feet as thresholds? They refer to another article, but that article doesn't shed much light onto the problem as well - why does the research cover the range of 1996-2006? - the article looks at the low-income housing project built in 1996-2006. What's about the projects built before that? - what was located on the site before the project was built?

63 points by gerbler 6y ago

In the markets with already extremely high demand, arguably markets where value and price are already fully uncoupled (eg bubble markets). An analysis on more "normal" markets would, I suspect, paint a very different picture.

stormbrew 6y ago
Ok? But the studied markets are the ones where low income housing is both most needed and also often staunchly opposed by nimbys.
- remarkEon 6y ago
  Yeah, but that's the point the parent is making. "Most needed" just means "high demand market", and in markets like that it's almost impossible to do anything to upset the trajectory of housing costs - unless we have another 2008-style mortgage crash because of fraud. The lesson to take here is that putting affordable housing in excessively expensive markets might actually be a really smart idea.
  - woah 6y ago
    It tends to be excessively expensive to build in those markets, which is what has led to the excessively high prices in the first place.
- Waterfall 6y ago
  Needed by whom? Why does someone who can't afford the prices deserve cheap housing downtown?
netcan 6y ago
This is the premise. It's not intended to prove the point widely, just in high price/demand markets. Given low inventory and high prices in these tight markets, we set out to uncover how much homeowners really have to fear.

ergocoder 6y ago

Unless they expect low-income people to cause issues, why would housing price decrease? It should increase because the amount of land of normal price decreases. Also, I always joke that you can help lower housing price in the area by causing non-offense nuisance. Walking shirtless and talking gibberish to yourself loudly. It will probably help a little.

seanmcdirmid 6y ago
In the USA, many areas have fixed schools you can go to. School performance is a high indicator of housing value, while lower income students generally pull that down...a lot. So you could lower housing prices a lot more effectively by convincing kids in the area to goof off more and not take school seriously.
- chii 6y ago
  > School performance is a high indicator of housing value but it's not a causal effect - or at least, it's a lot more complicated than a simple causal effect. School performance is affected by budget, which is paid via taxation, as well as resources available from the parents' contributions. Poorer neighbourhoods will obviously have parents contribute less, even if the taxation is the same (which, is highly unlikely as well). The cumulative effect is that poorer people receive a poorer education, which compounds over generations, and causing a negative feedback loop.
  - lotsofpulp 6y ago
    > but it's not a causal effect - or at least, it's a lot more complicated than a simple causal effect. It is a causal effect since parents with more resources (higher paying jobs, higher levels of education, more connections/resources) will be living in higher value housing.
  - burfog 6y ago
    School performance is not much affected by budget. The terrible high schools in DC have really high budgets. The problem lies elsewhere. It's really simple. Kids tend to be like their parents. Parents who raise kids well have a strong preference to be among their own kind. The parent who sits down at night to check homework is nothing like the parent who interrupts homework in favor of entertainment. The parent who enforces discipline is nothing like the parent who lets kids run in gangs. Families are in a bidding war to be with other families that prioritize education. Families without those values will bid lower, and thus be excluded.

OneGuy123 6y ago

This study is useless because it looks at this on only a 10 year span. To go from a "good neighbourhood" to a "bad neighbourhood" takes longer time than just 10 years since more and more houses are build graudually and people move in over longer periods of time until the majority of the population there is low-income.

Waterfall 6y ago
Do you have a study where it shows what happens over a longer period of time? The period of 1996-2006 is very suspect too.
hadlock 6y ago
Also the study includes San Francisco.... which is going to skew the results significantly

thinkingkong 6y ago

The low income property makes almost no difference. What matters is low income by density. If you spread out low income housing then you get to build it and it has no effect on prices or perceived value. If you had tons of dense blocks of housing, then I could see how youd end up with a deteriorating situation.

bb2018 6y ago

I am in favor of looser zoning laws and generally consider myself a YIMBY. However, I wouldn't say it is good politically to only support local low-income housing conditional on the fact that there is no negatives. I think that is the best policy but also acknowledge that there will be some tradeoffs. As others have said I don't think looking at home values in major cities like Boston or Seattle is that interesting. Cities are used to having very rich areas next to poor ones. I grew up in a town of about 20,000 that had close to no housing that wasn't zoned as single family. As a result, the median income was very high, property taxes stayed extremely low as a percentage (since everyone was contributing a lot), and the schools were considered great despite people not having to pay a lot in taxes. The neighboring town had higher taxes (because the median property value was significantly lower) and the schools were known to be bad. I wish there was more state level funding at the time - but there wasn't and don't think there is now.

pydry 6y ago
>However, I wouldn't say it is good politically to only support local low-income housing conditional on the fact that there is no negatives. It obviously isn't but the history of progressive politics demonstrates that ideological purity is a great way of never getting anything real done. E.g. planned Parenthood's murky beginnings, food stamps (buyer of last resort for leftover agricultural produce), schools (training kids to be obedient factory workers). I doubt there are any progressive institutions which aren't partly borne out of an uneasy alliance with some powerful but unethical group whose interests either align or are at least aren't all that badly affected.

netcan 6y ago

Short & medium term effects on real estate prices is only part of the issue. Ultimately, NIMBYism exists for a bunch of reasons... and the reasons don't matter much. Once you have actual organized NIMBYism, you are selling to existing property owners and residents. They have no real reason to "buy" this story. Either low cost housing doesn't affect anything, or it is against their interests. In no scenario does benefit them, so why shouldn't they object... just to be safe? At the least, construction is noisy and unsightly. I think NIMBYism should be accepted as-is. Existing housing has an interest in preventing new housing by default, especially down market of them. That's how organised NIMBYs see it. That's how it plays out in practice. YIMBYs are not going to beat NIMBYs locally. NIMBYism exists. The relevant questions are about how to build despite of NIMBYism, not how to reason with it.

oehtXRwMkIs 6y ago
Highly agree. It seems like the only recourse these days is simply overriding NIMBYs at the state level (I think CA is close to this point) when the housing crisis becomes so acute that it becomes politically viable to simply go against the many NIMBYs' wishes at the higher levels.
- ed25519FUUU 6y ago
  NIMBY is only one face of the coin that makes it difficult for building. Local governments are also extremely satisfied placing a high bureaucratic burden (red tape) on new development. Think of setback laws, environment impact studies, zoning, facade ordinances.
  - oehtXRwMkIs 6y ago
    To my knowledge that's often because local governments are inherently NIMBYs since they only represent locals by definition. Local governments don't listen to potential locals or outsiders. So I don't really agree that local governments and NIMBYs are different sides of a coin. There is a great amount of overlap and personally I suspect any rules that slow development to be NIMBY motivated.
  - 6y ago

Waterfall 6y ago

>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. Talk about cherry picked years. Why don't they analyse from 1998 to 2008 and say the same thing? Did it really take until 2020 to post this? >Of the 20 markets examined, Denver was the only metro area where homes located near low-income housing projects registered a positive effect in terms of price per square foot after a project was completed. And the absence of serious, critical thought. Has trulia never heard of correlation vs causation?

stepstop 6y ago
> And the absence of serious, critical thought. Has trulia never heard of correlation vs causation? They probably don’t teach that in data science boot camps
- Waterfall 6y ago
  They had to cherry pick it. This article is intentionally misleading.

AlexTWithBeard 6y ago

This is an interesting example of a pseudo-research article. It indeed looks like it's using scientific approach to an important problem, but the method is questionable: - why did the authors pick 2,000 feet and 4,000 feet as thresholds? They refer to another article, but that article doesn't shed much light onto the problem as well - why does the research cover the range of 1996-2006? - the article looks at the low-income housing project built in 1996-2006. What's about the projects built before that? - what was located on the site before the project was built?