A new peer-reviewed study found that building multiple publicly subsidized low-income housing developments in a neighborhood doesn’t lower the value of other homes in the area and can in fact increase their worth. The study looked at 500 developments built in the Chicago area from 1997-2016 that used the Low-Income Housing Tax Credit (LIHTC). The authors then looked at their influence on over 600,000 nearby residential property sales by using local property assessment and tax records.
Average home prices increased by 10% in areas within a quarter-mile of the first affordable housing development that was built in a neighborhood. The authors isolated the LIHTC program by assessing preexisting neighborhood market trends to ensure that each area examined wasn’t already experiencing faster growth, and also by comparing prices in the study areas to comparable homes in other non-study neighborhoods.
These findings are a boon to advocates of increased affordable housing construction. While the study did not examine the effects of construction on rental prices, they add to a growing body of research on the benefits of increased affordable housing construction to create more mixed-income neighborhoods.