Does federally subsidized rental housing depress neighborhood property values?

Few communities welcome federally subsidized rental housing, with one of the most commonly voiced fears being reductions in property values. Yet there is little empirical evidence that subsidized housing depresses neighborhood property values. This paper estimates and compares the neighborhood impacts of a broad range of federally subsidized rental housing programs, using rich data for New York City and a difference‐in‐difference specification of a hedonic regression model. We find that federally subsidized developments have not typically led to reductions in property values and have, in fact, led to increases in some cases. Impacts are highly sensitive to scale, though patterns vary across programs. © 2007 by the Association for Public Policy Analysis and Management     

Revitalizing inner‐city neighborhoods: New York city's Ten‐Year Plan

Abstract

This article examines the impact of New York City's Ten‐Year Plan on the sale prices of homes in surrounding neighborhoods. Beginning in the mid‐1980s, New York City invested $5.1 billion in constructing or rehabilitating over 180,000 units of housing in many of the city's most distressed neighborhoods. One of the main purposes was to spur neighborhood revitalization.

In this article, we describe the origins of the Ten‐Year Plan, as well as the various programs the city used to implement it, and estimate whether housing built or rehabilitated under the Ten‐Year Plan affected the prices of nearby homes. The prices of homes within 500 feet of Ten‐Year Plan units rose relative to those located beyond 500 feet, but still within the same census tract. These findings are consistent with the proposition that well‐planned project‐based housing programs can generate positive spillover effects and contribute to efforts to revitalize inner‐city neighborhoods.     

Managers of Transition—Leadership in Post-Communist Romanian Companies

The article presents the perspectives of managers as part of the Romanian organisational elite on the communist regime and on the transition period, and the values and principles that informed their behaviour as managers in each period. For the first decade after the end of communist rule, managers were drawn mainly from the second level of management of the state-owned enterprises of communist times. As a group they had been selected and formed in late communism. Among the main advantages of this social group were that they demonstrated considerable survival capacity, ideological neutrality and an ability to manoeuvre in a turbulent environment. On the other hand they had to adapt to their new environment drawing on the skills and mentality they had developed under the old regime. The research employed a qualitative method based on the interpretation of conversations between managers and students.     

Comment on Jack Goodman's “houses,apartments, and the incidence of property taxes”

Abstract

Goodman finds from his analysis of the 2001 Residential Finance Survey that multifamily housing bears a higher effective property tax rate (EPTR) than single‐family owner‐occupied housing and argues that much of the differential is associated with the lower average property value of apartments. We offer comments on how this important research can be enhanced and analyze the EPTR by using a different database, the Public Use Microdata Sample (PUMS) of the decennial census.

Like Goodman, we find from the PUMS that the EPTR of multifamily housing is high relative to that of single‐family detached housing and that lower‐value multifamily housing has a higher EPTR relative to that of higher‐value multifamily units. We offer preliminary findings from the PUMS on the implications of the EPTR for development patterns (it may discourage smart growth), equity (the poor and minorities bear a higher tax burden), and housing (high EPTRs challenge affordability).     

Nonprofit housing and neighborhood spillovers

Nonprofit organizations play a critical role in U.S. housing policy, a role typically justified by the claim that their housing investments produce significant neighbor‐hood spillover benefits. However, little work has actually been done to measure these impacts on neighborhoods. This paper compares the neighborhood spillover effects of city‐supported rehabilitation of rental housing undertaken by nonprofit and for‐profit developers, using data from New York City. To measure these benefits, we use increases in neighboring property values, estimated from a difference‐in‐difference specification of a hedonic regression model. We study the impacts of about 43,000 units of city‐supported housing completed during the 1980s and 1990s, and our sample of property transactions includes nearly 300,000 individual sales. We find that both nonprofit and for‐profit projects generate significant, positive spillover effects. This finding in itself is significant, given the widespread skepticism about the impact of subsidized housing on neighborhoods. We also find some differences across sectors. First, the impact of nonprofit housing remains stable over time, whereas the effect of for‐profit housing declines slightly with time. Second, while large for‐profit and nonprofit developments deliver similar benefits, in the case of small projects, for‐profit developments generate greater impacts than their nonprofit counterparts. These differences are consistent with theoretical predictions. In particular, in the presence of information asymmetries with respect to housing quality, the non‐distribution constraint should lead nonprofits to invest more than for‐profits in developing and maintaining features that benefit the broader community. Meanwhile, the fact that scale makes a difference to nonprofit impacts may reflect the capacity constraints often faced by smaller nonprofits. ©2006 by the Association for Public Policy Analysis and Management     

The potential and limitations of mortgage innovation in fostering homeownership in the United States

Abstract

This article presents an empirical analysis of mortgage innovation as a vehicle to enable renters, especially those from traditionally underserved populations, to realize home‐ownership. It examines the financial and underwriting criteria of a typology of mortgage products, from those adhering to historical standards to some of today's most liberal loans, and develops synthetic models to account for all direct purchase costs. These models are calibrated using 1995 data on renter demographic and financial characteristics from the Survey of Income and Program Participation.

Compared with historical mortgages, today's more innovative loans increase the number of renters who could hypothetically qualify for homeownership by at least a million and expand potential home‐buying capacity by $300 billion. Certain policies could greatly expand the potential gains. Nevertheless, even the most aggressive innovations can play only a limited role in efforts to deliver the material benefits of homeownership to underserved populations.