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56 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA How Low-Income Housing Construction Influences Home Prices Researchers examine the effects of affordable-home developments on nearby property values. T he idea that the country could use more affordable homes is widely accepted, however, homeowners and community groups often rebuff the proposition of low- income housing within their own neighborhood, believing, among other things, that such developments could drag down the price on their own property. A Redfin study of more than 220,000 home sales provided data that researchers analyzed to determine whether such concerns are justified. What they found is that low-in- come housing developments "had no consistent impact on the sale prices of nearby homes." In some metros, houses around the afford- able addition even went up in price. In just four of the examined areas did prices dip following the introduction of low-income hous- ing. The study's authors looked at 26 metro areas from 2007-2019. In 18 of the 26 metro areas studied, no significant difference was detected in the prices of nearby homes sold before and af- ter the construction of a low-in- come housing development, when compared with similar homes farther from the development but within the same neighborhood. In four of the eight metro areas where significant differences were detected—Boston, Philadelphia, Washington, D.C., and Charlotte, NC—homes near low-income housing developments sold for more after the development was constructed. In the remaining four metro areas—Chicago, Las Vegas, Phoenix, and Warren, Michigan—homes sold for less after low-income housing develop- ments were built nearby. "For children in low-income families, living in a neighborhood with less poverty can have a big impact on mental and physical health as well as long-term earn- ings throughout their life," Redfin Senior Economist Sheharyar Bokhari said, citing a separate study. "But economically inte- grated neighborhoods—those with low-income housing near homes for middle- and high-income households—are so rare because development of low-income hous- ing often faces strong opposition from neighbors who are con- cerned that the project will lower their home values. These percep- tions have made socio-economic segregation even more pervasive throughout the United States, further exacerbating social, racial and housing inequalities." Across the board, the more expensive the homes in a neigh- borhood, the more likely it was that the addition of a low-income housing development resulted in an increase in home prices in the neighborhood, the study found. "The data suggests that it can be a win-win to put low-income housing in expensive neighbor- hoods, benefiting both current homeowners and low-income residents," Bokhari said. "Because these projects are being built by private developers, they often have an incentive to identify places that have good prospects for growth. On the flip side, they're also less likely to plan projects in areas that are less desirable." Redfin analyst Tim Ellis concludes, "There are still many unknown factors, but overall, this study supports the idea that low- income housing does not degrade property values."