Gay Neighbors Impact Property Values

New research finds an increase in same-sex couples can nudge home prices either up or down depending on the political orientation of the neighborhood.
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When gay people move into a neighborhood, do property values go down?

Newly published research suggests the answer is yes — but only for neighborhoods with negative attitudes toward gay people.

A look at sociopolitical attitudes and home prices in a major Ohio city finds “an increase in the number of same-sex-couple households is associated with an increase in house prices in more liberal neighborhoods, and a decrease in house prices in more conservative neighborhoods.

“This suggests that gay and lesbian coupled households do experience prejudice in conservative neighborhoods,” economists David Christafore and Susane Leguizamon report in the Journal of Urban Economics.

Using data from before the 2008 economic crash (and subsequent plunge in housing prices), the researchers focused on the Columbus, Ohio, metropolitan area, which they broke down into neighborhoods using census tracts.

They examined the number of same-sex, unmarried partner households (as reported in the 2000 census); housing prices, taken from a data set of 20,027 real estate transactions; and the percentage of Ohioans who voted for the Defense of Marriage Act ballot initiative in the 2004 election. That vote ranged widely from one census tract to another, from a low of 31 percent approval to a high of 85 percent.

“The act stated that a marriage could only be entered into by one man and one woman, and negated legal recognition of same-sex marriages which occurred in other states,” they write. “A higher percentage of households voting in favor of DOMA is used as a proxy for whether the area is more socially conservative, while a lower percentage is used as a designation of a more socially liberal area.”

The economists found “an increase in the number of same-sex households is associated with an increase in house prices for liberal areas” — that is, for neighborhoods where the vote for DOMA did not exceed 59.5 percent. In contrast, for areas that voted heavily in favor of the act, an increase in same-sex households was associated with “a reduction in housing prices.”

In very conservative neighborhoods — those where an overwhelming majority voted in favor of DOMA — an increase in the number of same-sex households  is associated with a 1 percent reduction in housing prices. In very liberal neighborhoods, the reverse is true; an increase in same-sex households is associated with a 1.1 percent increase in home prices.

Breaking the numbers down further, the researchers found an increase in lesbian households had an “insignificant effect” on home prices. That means this effect — both positive and negative — is triggered by households headed by gay men.

Christafor and Leguizamon’s research puts into context a provocative 2009 paper by Richard Florida and Charlotta Mellander, which found home values are higher in cities with large numbers of “artists, bohemians and gays.” Those authors argued that an open, accepting culture helps promote a region’s economic growth.

That may be true. But as this research reminds us, housing prices — and levels of openness — vary considerably not only from one metropolitan area to another, but also from one neighborhood to another.

So, perhaps there is a literal price to be paid for holding onto an attitude of intolerance. This study suggests a homeowner’s homophobia — if it reflects the attitudes of his neighbors — could end up lowering the value of his property.

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