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values within their immediate neighborhoods. The source of this positive externality is not clear. It may be attributable to the transformation of vacant or derelict eyesores into pleasant well-maintained homes. It may also be caused by the immigration of relatively higher income residents to the neighborhoods. Finally, homeownership itself may generate positive impacts for the community, ranging from greater neighborhood stability and better upkeep to more community activism. In future work, we hope to shed more light on the roots of the positive effect. In particular, we will compare the effects that the city’s rental housing programs have on surrounding property values to the effects of homeownership programs. To the extent that owner-occupied housing appears to have larger effects, it might suggest that owneroccupied housing yields unique benefits, above and beyond the effects of removing blight and producing pleasant and attractive homes. As for policy implications, the paper suggests that owners of properties in the relevant communities will enjoy an increase in wealth that appears to be generated by the new housing. In addition, to the extent that the city reassesses properties in these communities, additional tax revenues will be generated. Of course, higher property values may not benefit everyone. Rents may also increase in these areas to reflect the increase in value attributable to the homeownership programs. For low-and moderate-income households already facing difficulties in paying rent, an increase in homeownership in their community may therefore be a mixed blessing. 18 AndaswasshowninFigure4,less than one-quarter of households in the communities surrounding Partnership and Nehemiah projects own their homes. In addition, although existing homeowners will likely enjoy an increase in their wealth, to the extent property taxes also increase, financial hardships might arise. 18 In 1999, almost one-quarter of all renters in New York City paid more than half of their incomes in rent (Center For Real Estate and Urban Policy, forthcoming 2001). 26
References Chandler, Mittie O., Virginia O. Benson, and Richard Klein. “The Impact of Public Housing.” Real Estate Issues 18, no.1 (1993): 29–32. Cummings, Jean, Denise DiPasquale, and Matthew Kahn. “Affordable Homeownership: Measuring the Net Benefits of Homeownership for Low- and Moderate-Income Households in the City of Philadelphia.” Working Paper. City Research. Forthcoming. Cummings, Paul M., and John D. Landis. Relationships Between Affordable Housing Developments and Neighboring Property Values. Working Paper 599. Institute of Urban and Regional Development, University of California at Berkeley. DeSalvo, Joseph. “Neighborhood Upgrading Effects of Middle Income Housing Projects in New York City,” Journal of Urban Economics 1 (1974): 269–277. DiPasquale, Denise, and Edward Glaeser. “Incentives and Social Capital,” Journal of Urban Economics 45 (1999): 354–384. ________________ and Matthew E. Kahn. “Measuring Neighborhood Investments: An Examination of Community Choice.” Real Estate Economics 27, no. 3 (1999): 389–424. Donovan, Shaun. “Affordable Homeownership in New York City: Nehemiah Plan Homes and the New York City Partnership, A and B,” Kennedy School Case Program, 1252 and 1253. Cambridge, Mass: Kennedy School Case Program, 1994. Galster, George C., Peter Tatian, and Robin Smith. “The Impact of Neighbors Who Use Section 8 Certificates on Property Values,” Housing Policy Debate 10, no. 4 (1999): 879–917. Goetz, Edward, Hin Kin Lam, and Anne Heitlinger. “There Goes the Neighborhood? The Impact of Subsidized Multi-Family Housing on Urban Neighborhoods.” Working Paper 96–1. Minneapolis: Center for Urban and Regional Affairs, 1996.. Gyourko, Joseph, and Joseph Tracy. “The Structure of Local Public Finance and the Quality of Life,” Journal of Political Economy 99, no. 4 (1991): 774–806. Lee, Chang-Moo, Dennis P. Culhane, and Susan M. Wachter. “The Differential Impacts of Federally Assisted Housing Programs on Nearby Property Values: A Philadelphia Case Study,” Housing Policy Debate 10, no. 1 (1999): 75–93. Lyons, Robert F., and Scott Loveridge. “A Hedonic Estimation of the Effect of Federally Subsidized Housing on Nearby Residential Property Values.” Staff Paper P93–6. St. Paul, Minn: Department of Agriculture and Applied Economics, University of Minnesota. New York University School of Law, Center For Real Estate and Urban Policy. The State of the City’s Housing and Neighborhoods. New York: Author. Forthcoming 2001. 27
Page 1 and 2: JOINT CENTER FOR HOUSING STUDIES of
Page 3 and 4: Abstract In this paper, we look at
Page 5 and 6: I. Introduction Promoting homeowner
Page 7 and 8: analysis of home sales in the vicin
Page 9 and 10: launched soon after. Like the Nehem
Page 11 and 12: Our basic approach is to compare pr
Page 13 and 14: the magnitude of the impact. While
Page 15 and 16: community districts where Nehemiah
Page 17 and 18: community districts with Nehemiah o
Page 19 and 20: Figure 3: Location of Partnership a
Page 21 and 22: in census tracts citywide. As menti
Page 23 and 24: that is, the differential between p
Page 25 and 26: The estimated coefficients for the
Page 27 and 28: after completion, the gap shrinks b
Page 29: externalities created by the projec
Page 33 and 34: Appendix A Full Regression Results,
Page 35 and 36: (0.0185) (0.0184) (0.0183) Condomin
Page 37 and 38: (0.002) Vandalized -0.194 -0.188 -0

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