Housing Bubble

Study: Multifamily housing poses no detriment to home values

April 26, 2003

CHICAGO, /U.S. Newswire/ -- Multifamily housing not only provides shelter for nearly one out of every four Americans, its presence in lower- and moderate-income "working communities" poses no detriment to the value of other housing in the area, according to research by the Harvard University Joint Center for Housing Studies.

Using data from the U.S. censuses of 1970, 1990 and 2000, researchers found that-contradictory to the perception that multifamily dwellings lower property values-the average value of owner-occupied homes was highest in working communities with the most multifamily housing units.

Commissioned by Neighborhood Reinvestment Corporation as part of the organization's national NeighborWorks(r) Multifamily Housing Initiative, the Harvard Joint Center report will serve as the centerpiece for a daylong symposium in Chicago on April 24, 2003, featuring Boston Mayor Thomas Menino, president of the U.S. Conference of Mayors; New Haven Mayor John DeStefano, president of the National League of Cities; former Seattle Mayor Norman Rice, president and CEO of the Federal Home Loan Bank of Seattle and national housing and community development experts. The symposium will be held in conjunction with Neighborhood Reinvestment's Training Institute at the Palmer House Hilton.

"Housing in communities affordable for working families is in short supply throughout the country," said Ellen Lazar, executive director of Neighborhood Reinvestment. "In response, NeighborWorks organizations have joined in a special mixed-income multifamily initiative to address the shortfall nationwide."

Defined as neighborhoods where residents earn between 60 percent and 100 percent of area-wide annual median income, working communities are home to 157 million people, or slightly more than half of the entire U.S. population.

The report, which examines the challenges of providing America's moderate wage earners with access to decent, affordable housing in the communities they serve, noted that 30 percent of all dwellings in working communities nationwide were constructed within the last 20 years.

During that period, residential development in fast-growth Sunbelt working communities has exploded.

In metropolitan Austin, Orlando and Las Vegas, more than half of the homes in mixed-housing-stock (single family and multifamily) working communities were built in the 1980s and '90s, with 60 percent and higher built in areas with high concentrations of multifamily housing.
Even in slower-growth regions such as the Cleveland-Akron corridor, the proportion of homes built since 1980 in mixed-stock working communities was a healthy 15 percent.

Among the report's other key findings:

Working communities with high percentages of multifamily housing (more than 30 percent of housing units) have sustained a 30-year increase in home values in each of the largest 42 metropolitan areas.
Working communities are especially populous in the Midwest and South, where they account for about 60 percent of the regions' total populations.
Working communities with multifamily homes are stable places where poverty rates have barely changed in 30 years.
In general, working communities are found in the suburbs as often as they are in metropolitan urban centers.
Working communities are diverse, reflecting the nation's racial and ethnic demographics.
Multifamily housing often provides a more-affordable housing option for families in metropolitan areas with soaring real estate markets. The most dramatic increases in house values and rents over the past three decades are in San Francisco, Los Angeles, San Diego, Seattle, New York and Boston. However, in these and other cities, rents climbed more slowly than house values.

"Working communities include neighborhoods that are both stable and dynamic for the working people -- such as teachers, nurses, police officers, fire fighters, and office, store and factory workers -- who provide vital services to our broader communities," commented Nicolas P. Retsinas, Director of the Joint Center for Housing Studies of Harvard University.

Celebrating its 25th anniversary this year, Neighborhood Reinvestment Corporation is a national, public nonprofit intermediary created by Congress to support and expand revitalization of lower-income communities throughout America. The Corporation founded and supports the NeighborWorks(r) network of more than 220 community-based nonprofits serving more than 2,300 urban, suburban and rural communities nationwide. These organizations revitalize neighborhoods by mobilizing public, private, and resident-led partnerships and tailoring affordable housing, economic development, and resident leadership activities to meet specific community needs.

A full agenda for the April 24 symposium, "The Vitality of America's Working Neighborhoods: Meeting the Local Challenges to Multifamily Housing," is available online at Neighborhood Reinvestment's Web site at http://www.nw.org. The site provides additional information about Neighborhood Reinvestment Corporation and the NeighborWorks(r) Multifamily Initiative.

Source: US News Wire