Chatham Habitat for Humanity building more homes, this time in Pittsboro
Do Habitat for Humanity Homes have a negative impact on the values of surrounding homes?
That is the question the Raleigh Regional Association of Realtors asked a local real estate researcher to find out amid a growing concern over affordability in the Triangle and a controversial rezoning case in Cary.
In that Cary case many residents argued Habitat homes didn’t match the character of the area and would hurt home values.
Habitat for Humanity of Wake County tried to build 23 affordable homes on a 2.6-acre lot near downtown Cary, before fierce opposition to the rezoning proposal — from the nearby Scottish Hills neighborhood — eventually got the project limited to seven homes.
At the time, John Donachie, a Cary planner, said “It’s the most organized opposition I’ve ever seen to something like this.”
But the result of the study appears to stand in contrast to the rhetoric in Cary.
Habitat homes, it turns out, do not have a significant influence on the values of surrounding homes compared to neighborhoods without them, according to a study of Wake County written by Stacey Anfindsen of Birch Appraisal.
“It’s time someone stepped forward,” Anfindsen said of putting data behind the issue. “Everyone wants affordable housing, but no one wants it right next to them … at least this (study) is a starting point” to have a response to those people.
When it comes to debating affordable housing, the emotions on both sides of the argument take precedence, rather than actual data, Anfindsen said.
“At some point ... you have to say, ‘I hear you, but here’s the way things really are,’ ” Anfindsen said.
And, in reality, there is no clear data that Habitat homes have an impact on home values, he said.
Casey Angel, director of communications for the realtors association, said the study was not a direct response to the Cary rezoning case, but rather the growing shortage of affordable homes across the region.
“To be honest, our strategic priorities came before that case,” Angel said, though the association's release of the study mentioned the Cary case. “The fact of matter of is when you have inventory that is historically low for so many months in a row you are going to have people priced out of the market.”
The inventory of homes on the market in Wake County stood at just 2.1 months in April, a 8.7 percent decrease from the year before. That's the lowest Anfindsen said he's ever seen it. And the median sales prices of a home in Wake County is now at $300,202.
Southeast Raleigh focus
Anfindsen said he expects many will disagree with the findings from his report.
The study of Wake County focused solely on the 27160 ZIP code in Southeast Raleigh, the area with the highest concentration of Habitat homes in Wake County, which made it easier to study.
But because the study focused on one part of the county, the limited number of data points available for analysis might be viewed as insufficient to reach any conclusion, the study freely admits.
Due to the limited scope of the data, both Anfindsen and the realtors association refer to the study as a starting point for conversation about the impact of affordable housing, and one that might require further analysis when there are more homes to compare.
But that didn't stop Anfindsen from determining there was no significant difference in pricing between the neighborhoods with Habitat housing and those with none.
“It is my opinion that the presence of Habitat built housing within a subdivision (study group) has no influence on the subdivision metrics when compared to similar metrics in surrounding subdivisions (control group),” Anfindsen wrote in the summary of the report.
The report compared subdivisions with Habitat housing (the study group) and subdivisions with no Habitat homes (the control group) on nine metrics that ranged from average sales price and median sales price per square foot to days on the market and percentage of failed listings.
The report found that the subdivisions with Habitat homes were superior in four of the metrics and the control group was superior in another four. Another metric was inconclusive.
So, basically, it was a wash, Anfindsen said.
The subdivisions in the study group were Augusta Crossing, Crosstowne, Idlewood Village and the Ridges at Maybrook.
Growing housing need
Habitat for Humanity of Wake County was not involved in the making of the study beyond providing some data on homes it had built. But Kevin Campbell, the organization’s president and CEO, said he was glad the association was concerned enough about affordable housing to commission the study.
“It supports something that we have known anecdotally: That the data really don't support the idea that affordable housing negatively impacts housing prices around it,” Campbell said. “It’s kind of a wide held belief and urban legend that affordable housing will pull down my housing prices.”
It's not the only recent study to suggest that affordable housing might not be such a threat to home prices. A report from real estate services company Trulia found that in the nation’s 20 least affordable housing markets, low-income housing built during a 10-year span showed no effect on nearby home values. Another study from Stanford University found that low-income housing raised property values and lowered crime in surrounding neighborhoods as it attracted higher-income residents to move in.
Campbell added that he wished this study had been available during the controversy in Cary.
“One way to build affordable housing is through greater density, but that usually requires rezoning and people think that will hurt home prices,” he said.
And in Cary, Habitat lost 16 affordable homes because of that, he said.
Habitat hopes to build 74 homes this fiscal year. However that is just a drop in the bucket for what is needed in Wake County, he added.
“We want to step up because it is getting to be a crisis — 91,000 families have a housing need in Wake County,” Campbell said, citing a study that found nearly one-fourth of households are spending more than they can afford for housing.