Question

REAL ESTATE QUESTION (THERE'S NO OPTION FOR REAL ESTATE)

What is the significance of the subject matter of homeless shelter in the real estate industry? Fully Explain

Answer 1

The construction of a homeless shelter in an area can affect the property values of the surrounding community. While most people would think that it negatively impacts property values, studies show otherwise. 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. 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. Although, supportive housing is much more prevalent in poor communities, so its impact on affluent neighborhoods is not as well documented.