• Thu. Dec 1st, 2022

Does affordable housing depreciate nearby property values?

ByWillie M. Evans

Jul 1, 2022

BAKERSFIELD, CA (KGETComment) – While prices at grocery stores and gas stations have most of us tightening our purse strings as inflation hits record highs, it is rapidly rising housing costs that will have the more impact on the working class.

To combat the problem, many are advocating for the development of more affordable housing. But Deirdre Pfeiffer – a professor at Arizona State University for the School of Geographic Sciences and Urban Planning – said not everyone is on board with new affordable housing developments.

“Homeowners usually have a lot of their heritage in their house. They fear losing their wealth, so they are very risk averse when it comes to changes in the environment around their home,” she said.

Pfeiffer added that homeowners’ concerns that affordable housing would hurt their home’s value may stem from unconscious racial bias.

“Landlords associate certain types of housing, like certain types of affordable housing, with racial and ethnic minorities, sometimes without being fully aware of it,” Pfeiffer said. “There’s a lot of talk in the media, politics, policy-making, etc. who historically have linked affordable housing to racial and ethnic minorities and racial and ethnic minorities to crime and poverty. Homeowners may be using these stereotypes to oppose affordable housing.

However, Pfeiffer said there is no evidence that property values ​​go down or crime rates go up when affordable housing is introduced to an area. Pfeiffer said taking vacant land and filling it with buildings actually improves the look and continuity of the area.

Pfeiffer also suggested that affordable housing developers most often don’t target demographics associated with crime. She added that most of the time, people living in affordable housing account for 80% of the region’s median income.

“When you frame it as housing for the elderly, teachers, police officers, etc., concerns about increased crime become much less important. Keep in mind that adolescent and young adult males are most at risk of crime; affordable housing generally does not target this demographic,” she said.

In a Nextdoor post discussing a proposed project for low-income people in Bakersfield, California, most homeowners in the area said they rejected the idea of ​​introducing this type of property to the neighborhood.

Most said they planned to oppose the project at a town planning meeting or voice their concerns to the city via email.

Some of those who oppose the project have said moving forward will drive down property values.

“It’s an area where the houses are all valued at $500,000+. Consider the devaluation of homes if this project is approved and completed. Not to mention that most people who would live in these small units are mostly unemployed or living on government assistance,” Mac Anderson wrote on the public forum.

But putting new affordable housing developments in more isolated areas, away from existing neighborhoods, may not be a viable option.

“Land prices, construction times and permitting costs tend to be higher and longer in existing neighborhoods, but the costs of connecting infrastructure to new neighborhoods can be high,” Pfeiffer said.

The search for more isolated areas also takes tenants away from public transport, a resource some rely on to get to work. According to the Ministry of Transport, true affordability takes into account the cost of accommodation and the cost of transportation from that location.

Benefits of Affordable Housing

Pfeiffer said affordable housing is essential for a growing community. Without more affordable housing, rising housing costs could crowd people out of the communities they have lived in all their lives.

“Imagine growing up somewhere and not being able to afford housing when you move out of your family home, so you have to get away from the people you love and the place you want to invest in,” Pfeiffer said. “Think of how the lack of affordable housing creates a missed opportunity to cultivate the lifetime investment of those who live in a place and support places where people know and care about each other.”

Local real estate appraiser Gary Crabtree reported in his “Crabtree Report” that list prices for homes currently on the market have risen 32.2% year over year. ApartmentList.com found the average rent in the United States increased 16% year over year.

Affordable housing advocates say that without more units, buyers and renters will be pushed out of the area to more affordable places or forced to live beyond their means. This means that people could spend 50-70% of their income on housing alone. The homeless population could also increase.

What is affordable housing?

Affordable housing is an umbrella term used to describe paying no more than 30% of a paycheck for housing costs, according to Pfeiffer.

While some people think that public housing – buildings built and run by the government – ​​is the only form of affordable housing, that’s not true. This means that private, non-government subsidized buildings can also be considered affordable housing as long as they offer low enough rents for the average person in the area to afford.

Affordable housing also includes buildings constructed with federal and state funds on the condition that they rent certain units to low-income individuals and families, Section 8 housing – a voucher program in which tenants receive government money to pay rent – and social housing.

“Many grant programs attach income targeting requirements to this threshold, for example to be eligible for a housing voucher that you must earn under a certain amount of money, and the voucher ensures that tenants do not have to pay more than 30% of their income on rent,” Pfeiffer said.

The waiting list for these programs is incredibly long. The Kern County Housing Authority in California, for example, opened their Section 8 waiting list in January for the first time in 10 years.

Pfeiffer said cultivating affordable housing is essential to a growing economy. When housing is affordable, the area becomes more attractive to potential employees. People also have more disposable income to spend on the local economy when housing is affordable.

“Employers care a lot about housing affordability. Affordable housing is attractive for recruiting employees, so it is also important for recruiting employers. From that perspective, affordable housing is necessary for a place to thrive economically,” she said.