Affordable Housing Increases Property Value
The topic of affordable housing has always been debated—many associate affordable housing with declining property values among other negative connotations. Recent research paints a different picture. According to a recent study shared by the National Association of Realtors, “Affordable housing units in above-median-income census tracts are associated with a 0.06 percent increase in property values, and affordable housing units in below-median-income tracts are associated with a 0.17 percent increase in nearby property values.” This is one of many studies that suggest affordable housing contributes to an increase in property values in the surrounding areas. We will explore the hows and whys of the appreciation of affordable housing.
Understanding affordable housing
Affordable housing refers to residential units that are economically accessible to low and moderate-income households. In these homes, occupants pay no more than 30% of their income on rent or mortgage because they are subsidized by non-profit organizations, government programs or private developers who are incentivized to include affordable units. It ensures that households have enough money to pay for other needs outside of rent or mortgage and utilities.
Dispelling the myth
One of the biggest myths when the topic of affordable housing comes up is that providing more of them decreases the property value in the surrounding area. This perception creates resistance from the existing community when new projects are proposed. However, research shows that well-designed and managed affordable housing can have a positive impact on property values. According to the Urban Land Institute, more investors are discovering that affordable housing can “be a relatively low-risk venture that offers a stable rate of return.”
A study by the National Association of Realtors found that affordable housing developments in suburban neighborhoods did not decrease the value of the nearby homes. In fact, properties within 2,000 feet of affordable housing projects saw a “2.9% increase in value on average.”
Conclusion
Contrary to common misconceptions, affordable housing can play a significant role in boosting property values. This type of housing brings stability, economic growth and revitalization to communities. It benefits not only the residents who live in them but also the wider neighborhood. As cities seek solutions to create more affordable housing options, understanding the positive impacts of affordable housing on property values is crucial.
