Low-income or affordable housing programs aim to help low-income people obtain housing. Affordable housing impacts household stability, economic security, education, housing stability, and health access. Unfortunately, there are negative perceptions surrounding affordable housing due to stereotypes, prejudices, myths, and ideological beliefs.

One of the most common negative perceptions of affordable housing is that people from the low-income bracket are poorly educated and more likely to engage in criminal activity. And there are some people who feel that recipients of affordable housing don’t deserve the assistance they receive. There’s also the belief that low-income communities are poorly maintained, poorly built, overcrowded, and therefore, unattractive.

With all the negative perceptions of low-incoming housing also comes the fear that there will be a decrease in property values of neighboring residences. When people look to invest in property, they consider factors such as location and neighborhood quality.

But does affordable housing really impact other properties in the neighborhood? Have property values shown to have gone up or gone down? And have these negative perceptions surrounding low-income housing been enough to dissuade investors?

The answer to whether there is a decrease in values in surrounding properties cannot be answered with a simple yes or no. We have to understand that each city experiences a different real estate market, housing challenges, and cultural mix. And communities that enjoy more cultural diversity also tend to suffer less from socio-economic related prejudices.

There are some buyers that specifically look for opportunities in areas close to low-income housing, expecting there will be more supply, and the prices will be lower. And with more interested investors who see the potential of these properties, there will still be demand for such properties, and therefore, property values will remain relatively the same.

Recent research indicates that affordable housing has a positive impact, if not zero effect, on property values in certain areas. A case study on low-income housing in Alexandria, VA, showed that home values within a one-block radius of affordable housing projects increased by 0.1%. The increase was described as “small but statistically significant.” The case study also revealed the following results, “Affordable housing units in Alexandria are associated with an increase in property values of 0.09 percent within 1/16 of a mile [one city block] of a development, on average” and “no effect on properties between 1/16 of a mile and 3/16 of a mile.” 

Most research points to low-income housing having a neutral or positive impact on surrounding property values. And many investors recognize the positive effects of affordable housing within a community. Affordable housing projects can lead to the creation of jobs, new tax revenues, increased purchasing power, and other positive economic impacts.

Experts believe that one of the best ways to change the public’s negative perception of low-income housing is by ensuring that the structures are attractively designed and well-maintained. It’s also essential to raise awareness of the positive economic impacts of low-incoming housing projects. Do you agree? Let us know your thoughts at info@cbicommercial.com