What impact do homeless shelters have on property values?

I had a call from a CBC reporter a few weeks ago asking me if there was a rush by Vanier residents to sell now that there is a homeless mega-shelter that will be built in the neighbourhood. I told her I hadn’t seen anything or heard anything to suggest that, but it got me thinking about what impacts a homeless shelter has on the local community and in particular, on property values.

My thinking was that there might be a drop in home prices during construction (which is always a pain for adjacent neighbours), but that at the same time, with the influx of construction work, there could be an increase in rentals. And after the shelter was built, in sales as well, as new employees moved closer to work.  But am I right? Or does a homeless shelter have a negative impact on property values?

There are certainly lots of people who think these shelters are bad news. Recently, in Ottawa, a petition circulated, created by a local businessman, calling the proliferation of homeless shelters in the Byward Market a “cancer.” It garnered 2,600 signatures before he removed it,  citing concerns that his business was about to be picketed.

Clearly, emotions run high on both sides when it comes to this issue. But what are the facts?

Well, surprisingly, according to studies, while a homeless shelter can impact property values, a bad school in the neighbourhood has a greater negative impact, dropping home prices by more than 10%.  And if the housing is supportive, i.e. one that offers an array of services to those in need, property  values can rise.

A study released by NYU’s Furman Center in 2008 found that supportive housing in New York City does not have a negative impact on nearby property values. In fact, the authors found that, five years after a supportive development opens, nearby property values tend to have risen more than in similar areas with no such facility. Importantly, neither the size of the building nor the density of the neighborhood had any impact on these results.

As for the question of crime, the same authors write:

A 1999 study conducted by the Urban Institute, a think tank based in Washington, D.C., came to similar conclusions about property values—in this case in Denver. It also looked at the impact of supportive housing on Denver’s crime rates. These researchers determined that, on average, crime rates were not higher near supportive housing compared to similar areas with no such development, except for disorderly conduct charges within 500 feet of facilities.

Once the dust settles around this kind of initiative, there can be an increase in crime right around the building itself, but it’s not the homeless people who are generally responsible: they tend to be the victims. This caused the authors of one study to hypothesize that because of their vulnerability, they may attract crime from other areas.  But even then, it’s statistically insignificant.

The biggest common denominator I found in reviewing a number of articles about this issue was a failure on the part of those erecting these shelters to consult adequately with those affected by them. Rumours spread when information isn’t shared. People expect and assume the worst when they don’t have adequate information.

My suggestion for those involved with the Salvation Army mega-shelter comes from my background in conflict resolution where multiple parties are involved. They should hold frequent (moderated) community meetings with experts who are able to provide information and answer questions as this initiative progresses. They need to hear people’s concerns and respond to them throughout this process, and be open to suggestions to minimize disruption both before and during construction.

But over the long haul, if the centre is well-managed, it appears from the studies done so far that rather than having negative impacts, it will actually have a positive impact on prices. And the good news is that as time passes, opposition fades, and the shelters simply become part of the neighbourhood.

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