The Impact of Social Housing Developments on Nearby Property Prices: a <scp>N</scp>elson <scp>M</scp>andela <scp>B</scp>ay Case Study

Abstract

Abstract Social housing projects often face substantial “ N ot‐in‐my‐backyard” ( NIMBY ) sentiment and, as a result, are frequently plagued by local opposition from communities who argue that nearby property prices will be affected adversely by these developments. International hedonic pricing studies conducted have, however, produced mixed results with some concluding that social housing developments may in fact lead to an improvement in surrounding property values. There is, however, a paucity of S outh A frican evidence. This study considers the validity of the most pervasive NIMBY argument, the claim that social housing developments negatively affect nearby property values, by considering the property prices of 170 single‐family homes in the W almer neighbourhood, N elson M andela B ay, as a function of their proximity to an existing low‐cost housing development. The results of this study indicate that in the case of one N elson M andela B ay low‐cost housing development, a negative impact is exerted on the property values of nearby houses.