Real Estate Research Debunks Affordable Housing Myth

A recent report from MIT’s Center for Real Estate debunks the popular notion that affordable housing developments inevitably depress the values of nearby single-family dwellings. Indeed, the research found that mixed-income, high-density rental developments -- so-called 40B developments – have no adverse effect at all on nearby property values.

The research was conducted as part of MIT’s Housing Affordability Initiative, a long-term commitment of the Center for Real Estate and the Department of Urban Studies and Planning. The initiative is designed to focus MIT’s resources on housing affordability in the Boston metropolitan area, especially in the areas of economics, planning, finance, architecture and engineering.

Under the leadership of director Henry Pollakowski, researchers studied seven affordable housing projects in six suburban towns near Boston – two in Littleton and one each in Mansfield, Norwood, Randolph, Wilmington and Woburn. The projects were deliberately chosen because they included "suburbanites' worst nightmares", some of the most dense and controversial 40B efforts completed in Massachusetts between 1980 and 2000.

To delineate the impact areas for each development, the researchers tapped many different sources of information -- zoning and land use maps, aerial photographs, road atlases, site visits and meetings with local officials. Then they compared the property values in the impact areas with values in the rest of the town over a number of years, using data from 36,000 property sales between 1982 and 2003. And in all cases, house price movements in the impact areas simply tracked those in nearby markets.

The results, while striking, were not surprising. Upon hearing them, Fred Habib, deputy director of the Massachusetts Department of Housing and Community Development, remarked: "We never hear complaints about the developments themselves once they're actually built." But he was relieved that independent research had corroborated what until now had been merely anecdotal evidence.

When the research findings were presented in April, Marc Draisen, executive director of the Metropolitan Area Planning Council, remarked that much of the opposition to affordable housing is expressed in ‘code’. "The arguments [against affordable housing] are arguments of race and class," he said, "but it's no longer polite to say those things, and it's no longer polite for public officials to make the statement I just made." One study won't change things, he noted, but he hoped that "the Center's work will chip away at the armor we use to oppose these things; more studies and forceful and dramatic leadership will lead to a gradual turn-around."

The full report, Effects of Mixed-Income, Multi-Family Housing Developments on Single-Family Housing Values, is available on the
Center’s website.