REAE 5311
By: M. Otis Thornton
Introduction
This post reports a study of the impact of permanent supportive housing on neighborhood property values in Fort Worth, Texas between 2000 and 2008. The intent is to utilize the results of this study as one component of a public education piece aimed at increasing community acceptance of permanent supportive housing developments. (A second component will focus on design considerations and management controls.)
Background
With broad public support, in the summer of 2008 the City Council of Fort Worth
, Texas adopted a ten-year plan to end chronic homelessness. The vision of the Directions Home plan is to make all homelessness rare, short-term and non-recurring experience in Fort Worth, Texas by the year 2018.
Based on positive, local experience and national best practices, a cornerstone of the Directions Home plan is increasing the supply of permanent supportive housing for chronic and vulnerable homeless people. Supportive housing is defined by a leading advocacy group as, “a successful, cost-effective combination of affordable housing with services that helps people live more stable, productive lives.”
By: M. Otis Thornton
Introduction
This post reports a study of the impact of permanent supportive housing on neighborhood property values in Fort Worth, Texas between 2000 and 2008. The intent is to utilize the results of this study as one component of a public education piece aimed at increasing community acceptance of permanent supportive housing developments. (A second component will focus on design considerations and management controls.)
Background
With broad public support, in the summer of 2008 the City Council of Fort Worth
, Texas adopted a ten-year plan to end chronic homelessness. The vision of the Directions Home plan is to make all homelessness rare, short-term and non-recurring experience in Fort Worth, Texas by the year 2018.Based on positive, local experience and national best practices, a cornerstone of the Directions Home plan is increasing the supply of permanent supportive housing for chronic and vulnerable homeless people. Supportive housing is defined by a leading advocacy group as, “a successful, cost-effective combination of affordable housing with services that helps people live more stable, productive lives.”
Across the country, permanent supportive housing (PSH) is proving to be more cost effective than leaving chronically homeless people on the streets. Coupled with impressive retention rates and therapeutic outcomes, this—perhaps counterintuitive—fact has led to its increasing acceptance by policy makers and advocates alike.
A Production Program Model was developed for Tarrant County to guide efforts to bring an additional 1,088 units of permanent supportive housing online in the coming decade. The model calls for both expanding the use of existing housing units by providing rental vouchers and creating new units through rehabilitation and new construction.
The majority of existing units of PSH in Tarrant County are scattered-site—typically a small number of units (<7) dispersed in multifamily developments throughout the county. Larger, congregate facilities and clusters of units exist, however, and this exercise is an effort to explore what, if any, impact they have had on surrounding property values. In November 2008, the Furman Center for Real Estate and Urban Policy at New York University published a policy brief on The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City. This analysis employed a complex statistical model to study property values that fell within one of three zones around a permanent supportive housing development. The zones they employed examined properties that fell within a 500-foot radius of a PSH development, a 1,000-foot radius of a PSH site or within the same census tract.
A Production Program Model was developed for Tarrant County to guide efforts to bring an additional 1,088 units of permanent supportive housing online in the coming decade. The model calls for both expanding the use of existing housing units by providing rental vouchers and creating new units through rehabilitation and new construction.
The majority of existing units of PSH in Tarrant County are scattered-site—typically a small number of units (<7) dispersed in multifamily developments throughout the county. Larger, congregate facilities and clusters of units exist, however, and this exercise is an effort to explore what, if any, impact they have had on surrounding property values. In November 2008, the Furman Center for Real Estate and Urban Policy at New York University published a policy brief on The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City. This analysis employed a complex statistical model to study property values that fell within one of three zones around a permanent supportive housing development. The zones they employed examined properties that fell within a 500-foot radius of a PSH development, a 1,000-foot radius of a PSH site or within the same census tract.
The Furman study examined over 7,500 units in 123 developments. Their research indicated:
the values of properties within 500 feet of supportive housing show steady growth relative to other properties in the neighborhood in the years after supportive housing opens. Properties somewhat further away (between 500 and 1,000 feet) show a decline in value when supportive housing first opens, but prices then increase steadily, perhaps as the market realizes that fears about the supportive housing turned out to be wrong.
It is not possible in Tarrant County to reasonably approximate the sample size and longitudinal depth of the dataset employed in the Furman study. However, it was felt that the spatial framework could be employed to conduct a more cursory survey of available data.
Methodology
Methodology
Subject Properties 
1. In 1996, the Cornerstone Assistance Network opened the New Life Center on Fort Worth’s Near Southside. A remodeled nursing home, the New Life Center is an 18-unit SRO (Single Room Occupancy) supportive housing development situated in an established residential neighborhood in the Fairmount Historic District.
2. Pennsylvania Place Apartments were developed by Mental Health Housing in partnership with the Enterprise Foundation. The 152-unit multifamily includes 25 units of permanent supportive housing for persons with severe and persistent mental illness. On-site supportive services are provided by professionals from Mental Health and Mental Retardation of Tarrant County (MHMRTC).
3. Samaritan House operates two programs on their Near Southside campus that provide permanent supportive housing opportunities for homeless people with HIV: Samaritan House, a 60-unit SRO that opened in 2001, and; The Villages at Samaritan House, a 66-unit Low-income Housing Tax Credit development that opened in 2006.
1. In 1996, the Cornerstone Assistance Network opened the New Life Center on Fort Worth’s Near Southside. A remodeled nursing home, the New Life Center is an 18-unit SRO (Single Room Occupancy) supportive housing development situated in an established residential neighborhood in the Fairmount Historic District.
2. Pennsylvania Place Apartments were developed by Mental Health Housing in partnership with the Enterprise Foundation. The 152-unit multifamily includes 25 units of permanent supportive housing for persons with severe and persistent mental illness. On-site supportive services are provided by professionals from Mental Health and Mental Retardation of Tarrant County (MHMRTC).
3. Samaritan House operates two programs on their Near Southside campus that provide permanent supportive housing opportunities for homeless people with HIV: Samaritan House, a 60-unit SRO that opened in 2001, and; The Villages at Samaritan House, a 66-unit Low-income Housing Tax Credit development that opened in 2006.
Data
4. Property values for 2000, 2004 and 2008 were obtained from the Tarrant Appraisal District. For 2004 and 2008, “Appraised Value[s]” were summed and averaged on a per square foot of improvements basis for the geography under inspection. For 2000, “Land Value” and “Improvement Value” were combined to derive a stand-in for appraised value.
5. ArcGIS geographic information system (GIS) software was employed to generate two, roughly radial buffers around the subject parcels[1]. If more than 50% of the area of a parcel was inside the circle, the parcel was included the calculations of property values for the zone.
6. A United States Census Bureau GIS layer was employed to identify census tracts from the 2000 Census. Where 500 foot and 1,000 foot zones were not wholly contained within a single census tract, data from both contiguous census tracts were used.
7. From year-to-year the continuity of GIS parcel coding is sometimes lost due to subdivision and/ or re-platting—a function of changing property tax identification numbers. Parcel identities that could not be maintained for the duration of the study period, 2000 – 2008, were excluded from analysis.
8. Park land and unimproved land in the 100-year floodplain were excluded from tabulations of value.
Results
Results are presented in the table: Proximity to Permanent Supportive Housing and Annual Property Value Appreciation per sq ft
4. Property values for 2000, 2004 and 2008 were obtained from the Tarrant Appraisal District. For 2004 and 2008, “Appraised Value[s]” were summed and averaged on a per square foot of improvements basis for the geography under inspection. For 2000, “Land Value” and “Improvement Value” were combined to derive a stand-in for appraised value.
5. ArcGIS geographic information system (GIS) software was employed to generate two, roughly radial buffers around the subject parcels[1]. If more than 50% of the area of a parcel was inside the circle, the parcel was included the calculations of property values for the zone.
6. A United States Census Bureau GIS layer was employed to identify census tracts from the 2000 Census. Where 500 foot and 1,000 foot zones were not wholly contained within a single census tract, data from both contiguous census tracts were used.
7. From year-to-year the continuity of GIS parcel coding is sometimes lost due to subdivision and/ or re-platting—a function of changing property tax identification numbers. Parcel identities that could not be maintained for the duration of the study period, 2000 – 2008, were excluded from analysis.
8. Park land and unimproved land in the 100-year floodplain were excluded from tabulations of value.
Results
Results are presented in the table: Proximity to Permanent Supportive Housing and Annual Property Value Appreciation per sq ft
Each of the three permanent supportive housing developments examined appreciated in value between 2000 and 2004 as well as between 2000 and 2008. The largest property value increases for neighboring properties were for those parcels within 500-feet of a permanent supportive housing development.
Parcel level data is available on the map: Change in Appraised Value Of Parcels By Proximity To Permanent Supportive Housing in Fort Worth, Texas 2000 - 2008
On a per square foot basis, the appraised value of all properties inside I-820 and within the City of Fort Worth grew at an average annual rate of 10.6% between 2000 and 2008. Properties in all geographic zones near permanent supportive housing that were studied appreciated 49 – 122% more than the City at large.
Discussion
This study did not account for many variables that impinge on neighborhood values such as transportation access, school quality and proximity to jobs. Thus, it would be inappropriate in my estimation to read this data as supporting a causal relationship between handsome appreciation rates and the presence of a permanent supportive housing development within 500 feet. However, it does seem reasonable to conclude that the presence of permanent supportive housing neither detracts from nor flat lines the value of parcels in closest proximity.
The evidence that properties closest to permanent supportive housing have grown robustly and consistently with the neighborhoods in which they are situated is encouraging news for property owners who may be concerned by a proposed development. It is hoped that this data, along with evidence of management excellence and commitment to outstanding design, will go a long way towards increasing community acceptance of permanent supportive housing developments.
[1] GIS data extraction, mapping, and numerous, helpful technical comments were provided by Noah Heath with the City of Fort Worth’s Planning and Development Department.
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