Building Homes, Reviving Neighborhoods: Spillovers from Subsidized Construction of Owner-Occupied Housing in New York City

TLDR

The Nehemiah and Partnership New Homes programs subsidize the construction of affordable owner‑occupied homes in distressed New York City neighborhoods. This study investigates how these programs affect surrounding property values and whether the impact changes after project completion. Using a geocoded dataset of all City property transactions from 1980 to 1999, the authors employ a difference‑in‑differences design that compares prices in small rings around project sites to comparable properties in the same ZIP code but outside the ring, and then assess changes after completion. Over the past two decades, property prices in the rings around the projects have risen relative to their ZIP codes, with evidence that the affordable home‑ownership programs contributed to this appreciation.

Abstract

This article examines the impact of two New York City homeownership programs on surrounding property values. Both programs, the Nehemiah Program and the Partnership New Homes program, subsidize the construction of affordable owner-occupied homes in distressed neighborhoods. We use a geocoded data set that includes every property transaction in the City from 1980 to 1999. Our analysis relies on a difference-in-difference approach. Specifically, we compare the prices of properties in small rings surrounding the Partnership and Nehemiah sites with prices of comparable properties that are in the same ZIP code but outside the ring. We then examine whether the magnitude of this difference changes after the completion of a homeownership development. Our results show that during the past two decades prices of properties in the rings surrounding the homeownership projects have risen relative to their ZIP codes. Results suggest that part of that rise is attributable to the affordable homeownership programs.