A sign of things to come? A home for sale on Winter Street near the proposed SMOC drug rehab facility.
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A sign of things to come? A home for sale on Winter Street near the proposed SMOC drug rehab facility. |
Many people have asked for evidence that a drug rehab shelter or other social service facility will adversely affect property values. This is really asking two questions: is there a measurable change in value based on proximity to a shelter, and is there a loss of desirability based on perception in Framingham because of all the shelters.
Many realtors have reported to us that it is more difficult to sell a home in Framingham, or that the selling price is lower than similar towns. One realtor reports an out-of-state buyer flatly stating "not in Framingham" when discussing requirements for his home in the area.
This perception affects all of Framingham. Even homes that are exactly alike are valued higher in neighboring towns than they are in Framingham. What does this mean? Two recent annual Town Meetings have had to make budget cuts to make up for multi-million dollar budget gaps. One Town Meeting member has said that if Framingham's tax base were valued just 1% higher, we would have had a surplus instead.
Instead, property values often show signs of falling in Framingham, as is the case of the Winter Street property pictured, or at least failing to keep pace with other towns.
A home's value doesn't have to go down to lose value. It merely has to fail to keep pace with homes in nearby areas. Your home equity means nothing if you can't sell your home and move into an equivalent one elsewhere. What's worse, victims of this relative loss in value are affected the most when there is a correction in the housing market (a "bubble" bursting). Those properties that suffered loss relative to similar homes in other areas will be worth the least, harming their owners disproportionately.
As to actual change in value, very little research has been done into drug shelters' effects on home values, probably because in the past, no sane person would have considered putting one in a residential area. However, we can take some guidance from similar research done on affordable housing and group homes.
In a 1993 report prepared by the Greater Baltimore Community Housing Resource Board, 50 neighborhoods with group homes were examined against a control neighborhood to see if there had been a change in property values. They analyzed sale prices of homes for a two-year period before and a two-year period after the group home was established in the neighborhood and found that "approximately 50% of the neighborhoods' residential property values were impacted positively and 50% negatively by group home placement. [...] These mixed results indicate that group home placement cannot be considered a certain predictor/cause of residential property decline or increase."
Framingham Values |
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| Framingham home values, 1996-2006. While growing, Framingham home values have long lagged the Middlesex County average, and the gap is growing. (Source: zillow.com) |
This study was flawed in two ways: first, no data on the makeup of the neighborhoods or group homes were made available, and second, they their conclusions were unsupportable by the evidence in the study. In fact, the evidence showed that areas with group homes showed the following compared to the control group:
Net property values increase: 15
Net property value decrease: 19
No data available: 16
The Greater Baltimore Community Housing Resource Board, in effect, determined nothing from this study other than the fact that group homes often did have an impact on property values, and the effect was more likely to be negative than positive. In fact, a relative loss in value was the most common outcome. However, rather than stating that something they did not understand was happening, they concluded that group home placement was not an issue.
In his 2002 report to the National Association of Realtors, George C. Galster, Professor of Urban Affairs at Wayne State University, did a thorough review of existing neighborhood impact literature and critiqued the analysis employed in many studies as inadequate.
Most of the early studies found no effect from affordable housing on neighborhood prices. More recent studies found evidence that both positive and negative effects are possible depending on a number of factors. For instance, putting a brand new or newly renovated housing development in a blighted neighborhood improved property values, just as you would expect.
Galster's analysis showed two factors in particular could lead to negative effects on neighboring property values:
He concluded that "assisted housing of various types had positive or insignificant effects on residential property values nearby in higher-value, less vulnerable neighborhoods, unless it exceeded thresholds of spatial concentration or facility scale [and] evinced more modest prospects for positive property value impacts in lower value, more vulnerable neighborhoods, and strength of frequently negative impacts was directly related to the concentration of sites and scale of the facilities." (emphasis ours.)
Again, this is just as you would expect. Communities are like ecosystems: they can take a certain amount of stress and adapt, sometimes even thriving. But often a stressed ecosystem can appear stable, yet be unable to take more stress. A small change in a stressed ecosystem can cause total collapse.
We are not saying that Framingham is near collapse, but we have clearly passed the threshold below which one could expect the community to absorb a new facility's impact. We have simply reached (and probably passed) the "enough is enough" stage.
A reader responded: “these services are open to the people in Framingham. Many youth from this town are in these programs. And I can assure you that they parents are thankful to have these services here!!! Many Framingham adults frequent these programs.”
We all agree, and we're happy to do our part to help these poor folks out. But I think it's fair to ask how many of the patrons of these facilities are from Framingham and how many are bused in. One clue came at a PILOT Committee forum, at which dozens of SMOC clients spoke. Now one of them was from Framingham, as Enzo Rotatori wrote in "Hearing stacked for SMOC." Then I think it's fair to ask why some of them are imported. Why don't the towns they are imported from do their share instead of shipping their residents here?
You know the answer, of course -- other towns make it as hard as possible for those facilities to expand there, or even pay social services such as SMOC to stay away, so they come to Framingham where it has (historically) been easy. That's why we have been asking our town to start doing the same thing, and we are pleased with the small steps the town has taken so far.
A better distribution of social services in the state would not only help communities like Framingham, but help the clients of social service programs, as well.
A Review of Existing Research on the Effects of Federally Assisted Housing Programs on Neighboring Residential Property Values
Report to the National Association of Realtors
George C. Galster, PhD
Clarence Hilberry Professor of Urban Affairs
College of Urban, Labor and Metropolitan Affairs
Wayne State University
September, 2002
The Impact of Group Homes on Residential Property Values in Baltimore County, Maryland
A Study Prepared by the Greater Baltimore Community Housing Resource Board, Inc.
P. O. Box 66180, Baltimore, Maryland 21239, (410) 453-9500
December, 1993
Framingham PILOT Committee minutes
Globe article lets Desilets mislead public on property values
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