LOW-INCOME HOUSING tax credit (LIHTC) developments significantly boost surrounding property values, according to a new study that examined the economic impact of affordable housing in New York City.
The Furman Center for Real Estate and Urban Policy at New York University also found that residents in a cluster of Bronx rental developments expanded the estimated local purchasing power by more than one-third.
The findings may help combat stereotypes about affordable housing.
“The research shows no evidence of the significant reductions in property values that communities sometimes fear when new subsidized housing is proposed,” says Ingrid Gould Ellen, faculty co-director of the Furman Center. “To the contrary, the research finds these developments can lead to increases in nearby property values over time.”
Throughout New York, project investments increased property values, reducing the difference in the value of properties that were located near the LIHTC projects and those farther away. “On average, that gap was closed by 6 percentage points right away, reflecting improved neighborhood quality as perceived in the marketplace,” says the report. “Within five years, the gap decreased by nearly 10 percentage points as revitalization effects took hold.”
The study also found that families paying affordable rents averaging $500 per month less than market rates more than doubled their discretionary income, putting them in position to buy health insurance, pay down debt, and save money to pay for education or buy a home.
Commissioned by the Local Initiatives Support Corp. and Enterprise Community Partners, Affordable Housing for Families and Neighborhoods: The Value of Low-Income Housing Tax Credits in New York City is available at www.lisc.org and www.enterprisecommunity.org.