A report by the Urban Institute published in April of this year shows new research on how affordable housing units impact property values on nearby residences. Although a common argument used to oppose affordable housing is the fear that it could lower property values, data from this report shows that this is not true. In fact, affordable housing developments can actually raise property values for nearby homes.
The research for this study was done in Alexandria, Virginia, and found that the development of affordable housing units increased property values by 0.09 percent in higher income neighborhoods, and 0.11 percent in lower income neighborhoods. Although this increase is small, it is statistically significant and helps disprove a large misconception about affordable housing, and adds to the substantial body of research suggesting that subsidized housing development tends to have a neutral to positive impact on surrounding neighborhoods.
In order to help make housing more affordable for low-income families, programs such as the Low-Income Housing Tax Credit Program (LIHTC), which is awarded by VHFA for Vermont, subsidize the costs of affordable housing development or rehabilitation through private or nonprofit developers.
The argument against building affordable housing in existing neighborhoods is often based on perceptions that affordable housing will have a negative impact on property values, reinforcing the “Not in My Backyard” (NIMBY) rhetoric in higher income neighborhoods. However, new studies are beginning to disprove this. The data from the Alexandria study suggests that if developed affordable housing is well managed and visually fits the character of the surrounding area, it will not have a negative impact on residential property values. In Vermont, VHFA works closely with developers to ensure that projects are well-integrated into the neighborhood they are built in and maintains ongoing compliance to ensure continued quality.
Not only does creating affordable housing have a neutral or positive impact on property values, but it also has significant social benefits for the community as well. Creating a model such as LIHTC that puts more people into housing decreases homelessness, and also has a positive neighborhood impact on reduced crime rate and emergency room visits, as seen in a recent study on the Housing First model based in Denver, Colorado. This creates a healthier community and decreases the amount of taxpayer money that is going to incarceration.
In Vermont, there is a significant gap between what families need and what affordable housing is available. 36% of households are cost-burdened, meaning that they are paying more than 30% of their income towards housing costs. Of those that are housing cost-burdened, over 40% of those households are paying more than 50% of their income towards housing costs. This considerable number shows the immense need for affordable housing for Vermonters. Public support for affordable housing is essential, and one way to do this is by showing how affordable housing can be beneficial for everyone in a community.