Affordable housing has been shown to have neutral or positive impacts on nearby property values; and it also helps to minimize the societal problems that do affect quality of life and drive-up costs for public services. All Massachusetts residents want to experience safety and well-being in their homes and neighborhoods.
Affordable housing and supportive housing are two of the most important tools in combating housing instability and homelessness. Well-designed affordable housing and supportive housing can have positive impacts on residents and the neighborhood. Providing permanent supportive housing benefits chronically homeless individuals and reduces the utilization of costly public services. For example, recent studies in Massachusetts and New York have found that supportive housing and the housing first approach, where homeless individuals receive housing with supportive services, are associated with a reduction in overall health care utilization and costs.27,28
There is evidence that affordable housing may decrease crime in lower income neighborhoods and does not cause increased crime rates in higher income neighborhoods.29,30 [The impact of affordable housing developments on local home prices varies depending on the neighborhood context, but the majority of evidence suggest that affordable housing does not lower property values of existing housing and in some instances increase home values.31 A recent study looking at Low-Income Housing Tax Credit (LIHTC) developments in Chicago found that there were positive price spillover effects of LIHTC development in both higher- and lower-income areas, but they were largest in lower-income neighborhoods.32 The findings support the idea that affordable housing development can both increase the supply of affordable housing in a community and improve economically distressed neighborhoods. When residents pay less for rent, they have more to spend on basic needs improving outcomes for their families and the community as a whole.]
Some residents of lower-income or formerly disinvested neighborhoods are concerned that new market rate housing will result in displacement by encouraging nearby landlords to raise their rent. Many residents have seen new development followed by increasing rents nearby. Some residents speculate that new housing has a beneficial impact on regional housing prices, but that the local effect is to drive up prices and cause people to be evicted; or puts homeownership out of reach.
While communities often do experience a correlation between housing development and displacement, the best available research shows that the creation of new homes in gentrifying areas is associated with slower rent increases than observed city- or regionwide.
In 2018, Vicki Been, Ingrid Gould Ellen, and Katherine O’Regan of the NYU Furman Center reviewed academic studies that evaluate the impact of increases in supply of market-rate housing on overall prices of housing. They found that a considerable body of empirical research shows that less restrictive land use regulation is associated with lower prices; and construction of new housing is crucial for keeping housing affordable, even when the construction is high-end. Been, Gould Ellen, and O’Regan do find that adding supply may raise neighborhood rents in some cases, but theory and evidence suggest that will not be the norm.
In 2023, Been, Gould Ellen, and O’Regan teamed up to update their review with more recent studies. They concluded again that increases in housing supply do improve housing affordability. In some cases, new construction reduces rents in neighborhoods adjacent to new development. Recent studies have not shown that new development increases displacement, they found.