By George Galster
Wayne State (MI) University
This report from a Wayne State University professor finds that federally assisted housing has an insignificant, or even a positive, effect on property values. Professor Galster finds that prior studies have overestimated the negative impact subsidized housing has on property values, and he uses a new methodology that measures property values both before and after affordable housing is con-structed (not just after construction, like many studies) to determine whether such housing affected property values, or whether property values in the neighborhood may have been already declining before the housing was built.
Galster finds that assisted housing had insignificant or positive effects on property values in higher-value, less vulnerable neighborhoods. It was more likely to improve property values in lower-value, more vulnerable neighborhoods. Any negative impacts were directly related to the size and scale of the subsidized housing.