We know that permanent supportive housing makes economic sense. It’s less expensive to provide a home, with support services, to a homeless person than it is to support that same person on the street. We also know it’s more humane than just making homelessness more comfortable. Check out our FAQ to learn more about why all of this is true.
But one barrier to housing homeless people is neighborhood opposition. Many people are not happy to hear that permanent supportive housing is going to be developed in their neighborhoods. They are concerned with the effect on crime, vagrancy, and property values, among other things. Many people think permanent supportive housing and homeless shelters are the same. They’re not.
As it turns out, permanent supportive housing might just have a positive impact on neighborhood property values. Check out Daniel Rubin’s article from The Philadelphia Inquirer, republished below since it was taken down at the Inquirer’s website.
Project HOME confounds property-value naysayers
By Daniel Rubin, Inquirer Columnist
One day last summer Sister Mary Scullion promised me a heart-warming Man Bites Dog story.
We were standing outside Project HOME’s offices at 1515 Fairmount Ave., and she was noting with
some satisfaction how properties in the next block were going for $900,000.
“I think real estate values actually increase when we put a facility for the homeless in a neighborhood,”
she said, eyes twinkling.
That would be news if you could prove it, I told her. Patience, she counseled.
Well, now it can be told. After a year of study, Econsult is about to release an analysis of the way
Project HOME’s 15 facilities affect local real estate values.
The summary: Where homes in Philadelphia have risen in value an average of 5 percent since 1993, they
have risen 6.8 percent within a quarter mile of Project HOME sites.
How could this be?
Every one of those facilities attracted neighborhood opposition, none louder and uglier than at 1515
Fairmount, where federal judges twice had to order the city to stop its obstruction.
Property values would plunge, residents predicted, and crime would rise. One neighbor, a lawyer,
prophesied that “crudeness and evil” would visit the good citizens of Fairmount and Spring Garden.
Econsult’s findings don’t chart crudeness and evil, although there is a lot of talk about hedonic regression
and dummy variables.
Eager for expert opinion, I called the Wharton School of Business at the University of Pennsylvania. A
research fellow there named Kevin Gillen called me back. The name rang a bell.
“Aren’t you the author of the report?” I asked.
“I am,” he replied. “I wear two hats. I’ll be the first to admit, and on the record, that even I was surprised
by the results.”
Gillen, an Econsult vice president, said he warned Sister Mary during their first conversations that she
might not like the results of the study. Then the numbers started coming in.
While Econsult found some initial dips in property values, they quickly recovered, then rose higher than
in the rest of that zip code.
The reason, Gillen said, is that Project HOME typically moves into economically distressed
neighborhoods and improves the buildings, which often had sat vacant.
Better than the alternative
“No one necessarily wants a recovering homeless person or a recovering drug addict in their
neighborhood, but the alternative might be an active crack dealer.”
Wanting another view, I found Dennis Culhane, a social policy professor at Penn who has studied the
effect of public housing on Philadelphia real estate prices. He said Econsult’s findings were similar to
what he’d found looking at property values and public housing.
Culhane credits Project HOME’s savvy in selecting neighborhoods to invest in. “Even if these sites alone
are not driving the better-than-average property-value increases, they certainly are not dragging these
property values down,” he said.
“Sister Mary has some acumen when it comes to real estate investment.”
So heads up, speculators. You might want to be buying where Project HOME buys.
What would happen in pricey Chestnut Hill, where an opponent of housing for a few homeless families
last summer said approval of the project would make him feel as if he’d written a $100,000 check?
Gillen said he isn’t sure.
He says there aren’t enough data to gauge the effect of Project HOME’s three Center City facilities. But
Sister Mary notes that across the street from Kate’s Place, a shelter for low-income people at 18th and
Sansom, an Irish developer bought a vacant lot for $36.7 million.
“What I know is that since we’ve been there, we’ve had a very positive impact. Maybe the rise in
property values is all coincidence. Maybe we do have a good record picking neighborhods. What
matters is that everyone is on board to pitch in and improve quality of life.
“It doesn’t matter if you’re wealthy or poor. It’s are you really committed to improving the quality of
Contact Daniel Rubin at 215-854-5917 or firstname.lastname@example.org.
We have every reason to believe that crime, vagrancy, and other negative issues will decline in areas where permanent supportive housing is developed. We know that cost declines. It’s good to see evidence that property values might increase when permanent supportive housing comes to a neighborhood.