Do Homeownership Programs Increase Property Value in Low Income Neighborhoods?

In this paper, we look at the impact of two New York City homeownership programs on surrounding property values. Both of these programs—the Nehemiah Plan and the New Homes Program of the New York City Housing Partnership—develop affordable, owneroccupied homes in distressed urban neighborhoods. Our analysis uses a hedonic model to compare the sales prices of properties in small rings surrounding homeownership sites to the prices of comparable properties in the same community districts, but outside the rings. We then compare the magnitude of this difference before and after the completion of homeownership units. Based on an analysis of 300,000 property sales, we find that prices of homes near to homeownership sites rose significantly relative to prices in their community districts between 1974 and 1999. Part of this increase appears associated with the construction of city-sponsored, affordable homeownership units…