For example, in Los Gatos (a high income area, with avg of $120K+/annual income at the time 15 years ago), the first low income rental housing had a requirement that renters' income ranged between 40-60% of that city's average (~$50-70K)-not exactly poverty level. Within the first 3 years, about 8 families had managed to save enough money to move out and purchase homes on their own (the goal of the program).
In that area, values continued to rise at normal to high levels, contrary to existing homeowner expectations.
I general, you can expect that the addition of an affordable income housing project to a neighborhood will slow down appreciation in that area. Since the homes have to be most likely owner occupied, at least you don't have to deal with the more frequent turnover that you usually see in predominantly tenant occupied areas.
Overall, it makes properties less attractive to buy; which may mean property onwers near the low income housing may be inclined to lower their price just to get the property sold. Despite the fact that appraiser's don't consider them as equal comparables, the property value may go down a bit and your property value may not increase as high as others away from low income housing.
Each city has to offer housing for all income levels Equal Housing Opportunity.
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Valuman is exactly right as far as appraisals are concerned. In addition to low income housing many cities also have moderate income housing. Appraisers recognize these homes as not comparables to non-income restricted homes.
There are some projects where a specific percentage of the home in that complex must be designated as low or moderate income, and that does tend to limit the value growth of other homes in that complex. Because they have a limit on how much value gain they can have over the years.Tough to sell your home for $50,000 for the exact same home next door.
I think you are asking about neighborhood prices in general. The fact is that all cities are now required to provide for low income housing so it's not something that's is particular to just one city or neighborhood. I live in Mission Viejo and we have new developments going in as a "mixed use" neighborhood....and it looks really nice on paper. I don't see this causing any decrease in home prices around it.....but your area might be different.
There certainly is that fear.....that it will cause a decrease in existing home values....so perception becomes reality.
Many have suggested putting these housing units in Savi Ranch where nobody lives so that it doesn't affect any home owners.
We'll all have to wait and see where they put them.
Low income people got 50% off with the proviso their unit stayed in the category.. less appreciation so when they sold other low income would be able to afford the home. Well, they sued. New owners did not want to lose the "equity" others enjoyed. Liberal courts said OK. Forgetaboutit. These give away deals always fail the free market test. Want another? Homes built for low income on YL Blvd, near Albertsons during the Brown administration.. builder got perks for the beach projects in exchange for low quality income tract.. built on metal jacks.. Trailers to anyone in the know. Attractive for the low income HO.. but now considered a trailer park. Lots of foreclosures next to expensive type homes. Would be more expensive sans this blight. More of this in YL, but you get the drift. Low income homes abound in near by cities.. just look at any Liberty St. listing
Short sales.. hey many available but low income refuse them. We have enough to go around now