www.furmancenter.nyu.edu F N school of law • wagner school of public service for real estate & urban policy urman ew Y ork The Impact of Supportive What Is Supportive ? IsSupportive What from New York City This policy brief is a summary of the Furman Center’s research on theeffects supportive housinghas Neighborhoods: Evidence Housing on Surrounding Researchers have found supportive housing to be an effective and cost-efficient way to way cost-efficient and effective an be to housing supportive found have Researchers who may need support tolive independently. support may who mayneed Residents homeless formerly include than placing them placing inashelterthan or treating them inahospital. 1 1 Persons Housing. Severe with in Supportive Mental Illness individuals can address the underlying causes of their —at far less cost cost less far homelessness—at their of causes underlying the address can individuals in temporary or transitional housing options, sign a lease or make some other long-term people young disabilities, physical or HIV/AIDS with people families, and individuals housing and support services is seen as key to providing a stable environment in which which in environment stable a providing to key as seen is services support and housing history history of substance abuse. Residents in supportive housing developments, unlike those house disabled and formerly homeless people. Supportive Supportive housing is a type of that provides on-siteservices to people portive portive housing developments are run by non-profit organizations thattypically provide both support services and management. and management. services support both Supportive Housing forSupportive Homeless Persons Severe Psychiatric With Mental Services Illness. U agreement. Developments provide a range of services to residents, which can include include can which residents, to services of range a provide Developments agreement. a with individuals or illness mental with people ex-offenders, care, foster of out aging - Sup counseling. abuse substance or health mental and training job management, case See, e.g., Culhane, Dennis, Stephen Metraux and Trevor Hadley. 2002. Public Service Reductions Associated with Placement of Homeless of Placement with Associated Trevor MetrauxReductions and Stephen Hadley. Dennis, e.g.,Culhane, Service Public See, 2002. on the values of surrounding properties. Thefull studyis availableat http://furmancenter.nyu.edu. C niversity f center PolicyFurman Brie enter Housing Policy Debate al. 2000. Tenureet . 13(1): 107 - 163; Lipton, Frank R., in 1 The combinationof permanent affordable . 51(4):479-486.

october 2008 NYU’s Furman Center for Real Estate & Urban Policy 2 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City 9518 9718 9919 9119 9319 9519 9719 9920 0120 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 Supportive Housing Supportive in NYC Our research looks only at the impact of single-site supportive housing (developments in which the supportive housing units all are located (SRO) buildings. Soon thereafter,nonprofit Soon buildings. (SRO) By 1990, New York City nonprofits were nonprofits City York New 1990, By Bronx. As seen in Figure B, there has been been has there B, Figure in seen As Bronx. ee oees r iig n substandard, in living or homeless were New York Agreement,” signed in 1990, was was 1990, in Yorksigned Agreement,”New were built in Manhattan, Brooklyn and the the and Brooklyn Manhattan, in built were developments these of majority whelming the late 1970s and early 1980s to provide to 1980s early and 1970s late the tive to fund the creation of thousands of of thousands of creation the fund to tive 2 2 units that are scattered-site (dispersed within non-supportive housing buildings). housing that non-supportive units are within scattered-site (dispersed in a single building but with it on-site services), social is to important note that New York has City an additional housing 9,000 supportive renovation the or construction gut new avacant of building. before 2004 thatNewresulted in City from opening York housing supportive all study: inthis examined developments all includes figure Note:This Figure B: HousingDevelopments Supportive C T the first of three initiatives that have helped in addition to providing on-site services. in addition to providingservices. on-site inadequately housed people with a range of of range a with people housed inadequately resi - housing supportive 220 than more in home­ for units housing supportive new privately-owned Occupancy Room Single privately-owned persons persons with mental illness. The “New York/ Supportive housing grew Supportive out of attempts in housing. Thesuccess of theseeffortsled the groups formed to rehabilitate the housing housing the rehabilitate to formed groups operating over 2,000 units of supportive supportive of units 2,000 over operating iaiiis A Fgr A hw, h over the shows, A Figure As disabilities. dences in the city for formerly homeless and services to mentally-ill individuals who who individuals mentally-ill to services state and city to sign a his­ a sign to city and state spur the development of over 14,000 units units 14,000 over of development the spur 1 able A: HousingDevelopments Supportive 4 1 3 1 3 - initia joint toric 8 less less ompleted Annually ­ 101010 New York III Agreement” was the largest yet, T Our Study by Borough (as of2003) Figure A: HousingDevelopments Supportive in in New York City over ten years. The large large The years. ten over City York New in disabilities with families and individuals following agreement. the 1990NY/NY the throughout development steady fairly past two decades, with a big building boom boom building big a with decades, two past Signed Signed in November of 2005, the “New York/ n single-site and of supportive housing (both scattered-site scattered-site (both housing supportive of committing $1 billion to cre to billion $1 committing cp o ti iiitv esrs ht there that ensures initiative this of scope able A: HousingDevelopments Supportive 9 n e t a t s 11 1

n a t t a h n a m d n a l s i 60 9 2 fr oees n at-risk and homeless for ) 5 28 n y l k o o r b 10 31 5 x n o r b ate 9,000 units units 9,000 ­ate 7 s n e e u q 3 9 7 NYU’s Furman Center for Real Estate & Urban Policy 3 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City voice forworries, example, that the support As providersAs of housing to supportive begin Despite the critical role that supportive supportive that role critical the Despite will make residents and visitors uncomfort visitors and residents make will il otne o e rbs development robust a be to continue will the neighborhood, thereby depriving them them depriving thereby neighborhood, the 3 3 Dehring and Nicholas A. Lash. 2000. The Effects of 2000.The Group 76(4):615-637. Homes Economics. onProperty Lash. Neighborhood Land Values. andA. Nicholas Dehring e.g.,Colwell,Petersee,homes, groupF, as suchhousingprecursorssupportive studies forofto 35-54;80(1): CarolynA. Economics. Land requiresome form ofpublic notification for fears that the housing will have a negative negative a have will housing the that fears approvals.funding anduse land necessary the secure to developments for ute lmt te ie o wih support which on sites the limits further impact on the neighborhood. Neighbors Neighbors neighborhood. the on impact monly express a concern that supportive supportive that concern a express monly commu- the to people bring infrastructure, the drain crime, increase will housing ive commu - local the by opposition and ments, city and state The built. be can housing ive ing such developments; and community community and developments; such ing implement the NY/NY III agreement, how agreement, III NY/NY the implement illness challenges. and other nity nity whose personal appearance or behavior and overburdenservices neighborhoods’ its impossible or difficult it makes often nity pipeline of supportive housing to house house to housing supportive of pipeline housing housing will depress the value of housing in expressing resist, often housing the host housing plays in helping to address the prob- homeless New Yorkers living with mental mental with living Yorkers New homeless life in the neighborhood. They also com- also They neighborhood. the in life lem of homelessness, communities asked to and triggering aspiral deterioration. of and triggering able, or otherwise decrease the quality of of quality the decrease otherwise or able, develop- housing supportive proposed all f oeta rtrs n hi investment, their on returns potential of opposition to hosting supportive housing housing supportive hosting to opposition See, e.g., Galster, George, Peter Tatian and Kathryn Pettit. 2004. Supportive Housing and Neighborhood Property Value Externalities. Externalities. Value Property Neighborhood and Housing Supportive 2004. Pettit. Kathryn and Tatian Peter George, Galster, e.g., See, ever, they are encountering two related and - build for suitable land of shortage serious a has City York New obstacles: significant - - - - What Do What We Know Theoretically, supportive housing develop- housing supportive Theoretically, h Fra Cne’ rsac am t fill to aims research Center’s Furman The hl sm wo poe uprie hous supportive oppose who some While About Neighborhood About Impacts of Supportive ofSupportive Impacts Housing? who otherwise would be living on the streets with the surrounding community, it could could it community, surrounding the with h spotv huig oe. Moreover, model. housing supportive the experiences credibleresearchthe tive, about the new supportive housing engage in offenin - engage housing supportive new the hs a i te ieaue ih rigorous, a with literature the in gap this results to urbansettings. denser researchers have studied the effectsof group few as 79 units) and limited time frames, and for illegal behavior, the housing cause might v huig hud ep o nom discus inform to help should housing ive objec facts, the of regardless so do may ing neighbor and provides useful services to the and providesneighbor services useful nearby, it likely would have a positive impact isn’t well-maintained or doesn’t blend in well - neigh raise or depress either could ments prices to drop. On the other hand, if a new new a if hand, other the On drop. to prices previous studies have been limited by data data by limited been have studies previous property values. property Similarly, if the residents of past twenty years. years. past twenty borhood borhood property values. If the development hoods,making itdifficult to generalize their have studied effects neighbor in low-density at specifically looked have few but homes, have a negative impact on neighborhood neighborhood on impact negative a have housing created in New York City over the the over City York New in created housing large-scale examination of the impacts of of impacts the of examination large-scale approximately 7,500 units of supportive supportive of units 7,500 approximately other neighborhoods other haveneighborhoods had with support new the if Similarly, values. property on orvacant property, topeople orhelps house development is attractive and replaces a a abandonedan as communitysucheyesore, replaces and attractive is development constraints, including small sample sizes (as (as sizes constraints, sample small including community, could it raise prices. good and conscientious a is development sions about proposed developments. Some Some developments. proposed about sions sive behavior or participate in or are targets targets are or in participate or behavior sive 3

- - - - - NYU’s Furman Center for Real Estate & Urban Policy 4 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City 1985 and 2003 and either were newly con- newly were either and 2003 and 1985 About OurResearchAbout OH, h Spotv Huig Network Housing Supportive the (OMH), 4 4 undergoing substantial renovation.undergoing substantial without development housing supportive a into converted was or rehabilitation cosmetic received building occupied an where instances We include building.vacant not formerly did a rehabilitationphysicalof complete,involved thatthe projects or construction new include In order to measure the impacts of support of impacts the measure toorder In hc w cmie wt assac from assistance with compiled we which Because we are interested in the impacts new developments have on a neighborhood, our data on supportive housing developments only only developments housing supportive on data our neighborhood, a havedevelopmentson new impacts the areinterestedwein Because the New YorkNew the Mental of Health Office State Hous of Department City York New the population. **Tracts with supportive housing are developments housing housing study. inour that those are **Tractspopulation. hostto supportive the 123supportive with numbersrepresent reported *All theSource: meanvalue (NCDB). across data 1990Decennial Census censustracts, by weighted T n Peevto ad eeomn (HPD), Development and Preservation ing 1974 between city the in selling homes ily fam- four to one and minium a use we values, property on housing ive in 123 developments that opened between between opened that developments 123 in oain o Spotv Huig (CSH)— Housing Supportive for poration Cor the and State, York New in providers rcs f l aatet ulig, condo- buildings, all of prices housing developments and their addresses,their anddevelopments housing large dataset with information on the sales sales the on information with dataset large link these data to a list of all the supportive supportive the all toof list a data these link and 2005, as well as property-level data data property-level as well as 2005, and a andfinancial technicalassistance - interme - asso member (SHNNY)—the York New of on the characteristics of the units sold. We sold. units the of characteristics the on ciation of nonprofit supportive housing housing supportive nonprofit of ciation comprehensive dataset includes 7,500 units This providers. housing supportive to diary structed or the result of gut renovations of of renovations gut of result the or structed able A: Demographics (as of1990)for C Number of Tracts Indicator* (as of1990) Homeownership RateHomeownership Poverty Rate

ensus T - - - racts with and without Supportive Housing racts Supportive withandwithout

123 developments is 48 units. 123 developments is48units. aat buildings. vacant Identifying the impacts of supportive hous supportive of impacts the Identifying was sited, tracts that now have supportive supportive have now that tracts sited, was to disentangle what causes what—to deter what—to causes what disentangle to h nihoho. eeoes f support of Developers neighborhood. the to build in neighborhoods with the lowest the with neighborhoods in build to that do not (see Table A). ie hte spotv huig affects housing supportive whether mine is challenging, primarily because it is difficult properties neighboring of values the on ing in such because neighborhoods, community more be example, for might, housing ive neighboring property values affected the the affected values property whether neighboring or values property neighboring in 1990, before most supportive housing housing supportive most before 1990, in - compari simple a fact, In values. property because more city-owned sites are availableare sites city-owned more values, because property low very with borhoods hoods, hoods, or because developers can only afford housing housing tended to have higher poverty rates - neigh in sites on housing the build to likely and lower homeownership rates than tracts in NYC All Tracts 28.6% 19.3% 2,217 opposition may be lower in these neighbor these in lower be may opposition decision to build supportive housing in in housing supportive build to decision son of census tracts in the city reveals that that reveals city the in tracts census of son Housing** Supportive now have Tractsthat 10.9% 31.4% 102 4 h mda sz o the of size median The

Housing Supportive without Tracts 30.5% 18.4% 2,115

- - - - NYU’s Furman Center for Real Estate & Urban Policy 5 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City 5 e drs ti polm y controlling for by problem this address We One thousand feet is approximately the length of four North/South streets in Manhattan; across the city, on average, 1,000 feet is about about is feet city,average,1,000 the acrosson Manhattan; in streets North/South four of length approximatelythe is feet thousand One we are able to specifically isolate the impact impact the isolate specifically to areable we ties very near to a supportive housing site site housing supportive a to near very ties proper of prices the between difference the ties more than 1,000 feet from the site but but site the from feet 1,000 than more ties support a of feet 1,000 and 500 within ties developments we study would have an effect on property values many blocks away in the fairly dense Manhattan, Bronx and Brooklyn Brooklyn are inwhich they concentrated.neighborhoods and Bronx Manhattan, dense fairly the in away blocks many values property on effect an have would study we developments the length of two blocks. While previous property value impact studies have looked at larger distances, it is unlikely that the relatively small after the supportive housing is built. is housing after the supportive feet of the development to similar properties in the same census tract but more than 1,000 feet away before and development represented is housing Supportive the by X Figure C:Methodology

Our strategy is illustrated in Figure C. Our Our C. Figure illustratedin is strategy Our s ul. t lo otos o neighborhood for controls also It built. is is constructed. Specifically,is constructed. our research com- neighborhood before supportive housing housing supportive before neighborhood is built, with a comparable group of proper of group comparable a with built, is it after and before development, housing ive neighborhood before the housing supportive rc apeito oe tm. Accordingly, time. over appreciation price pares the price differences between proper between differences price the pares between properties near to supportive supportive to near properties between housing sites and other properties in the the in properties other and sites housing and the prices of other properties in the same approach controls for differences in prices prices in differences for controls approach f h spotv huig Or approach Our housing. supportive the of still within the samecensustract. within still Price differences between properties inside eachring and those more than 1,000 feet away from the site Tract Census before supportive housing is built. isbuilt. housing supportive 500 feet 5

1,000 feet - - - - . We compare prices of properties within 500 feet and 1,000 very well differ from impacts on properties properties on impacts from differ well very supportive the from distance with vary Finally, because impacts might be felt as as felt be might impacts because Finally, foot ring. feet, before supportive housing opens. opens. housing beforefeet, supportive differ value property of estimate our from n dvlpet s on t b bit and built, be to going is development ing bring noise, truck traffic, and other prob- other and traffic, truck noise, bring may building any of construction because housing development, because the impact impact the because development, housing lems, we exclude the construction period period construction the exclude we lems, also allows us to examine whether impacts impacts whether examine to us allows also on a property closer to a development might ences between properties within the ring of of ring the within properties between ences soon as people learn that a supportive hous supportive a that learn people as soon 1,000 the in out further but affected still supportive housing and those beyond 1,000 Price differences between properties inside eachring and those moreand those 1,000feet than away from the Tract Census supportive housing after housing supportive X Housing Supportive it opens. it 500 feet 1,000 feet

- - NYU’s Furman Center for Real Estate & Urban Policy 6 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City 6 What Do What We Find? 1,000 feet from the supportive housing. We find that two to five years before a sup- a before years five to two that find We value of the properties within 500 feet of the The term “statistically significant” refers to the likelihood that the differences between the groups being compared (in this study, dif this the (in compared being groups the between differences the that likelihood the refers to significant” “statistically term The In the five years after completion, we find we completion, after years five the In ­ neigh same the properties nearby those of prices the that neighborhood. thethan surrounding to pure chance is five percent or less. Generally, researchers will consider results reliable only if they are statistically significant at the the at significant statistically are they percent if 90 (or higher) level. only reliable results consider will researchers Generally, less. or percent five is chance pure to due are results the that probability the that sure be can we level, percent 95 the at significant statistically are results that show methods ference the between values housing away) and of those the near further properties supportive could have occurred by chance. statistical If which show steady growth in the value of nearby properties. represents line development; the housing therehad solidthe purple supportive results new our no analysis, of been In this figure, dottedthe line represents what estimate we would have properties to nearby of happened the prices Our research finds little evidence to sup­ to evidence little finds research Our ing developments will reduce the price of of price the reduce will developments ing C Figure D: ofProperties Sales Prices Within 500 HousingR Feet ofSupportive port neighbors’ fears that supportive hous supportive that fears neighbors’ port portive housing portive developments are generally prop- opens, development housing portive portive housing development does not have not does development housing portive being being built in areas that are more distressed almost 4 percent less in than the properties sta a ciating more than comparable properties in in comparablemore than properties ciating experience strong and steady growth, appre - compar for sell site the of feet 500 within erties development. - sup a of opening the that find we contrary, surrounding properties over time. To the the To time. over properties surrounding omparison Group,omparison by prices within 500 feet (relative to similar properties

more than 1,000 feet away but in same census tract) significant ­tistically -6% -8% -4% -2% 0% 4% 2% - sup that indicates This group. ­ison -5 borhood but further than than further but borhood year relative 4- 2-1 -2 -3 -4 Y ear R 6 impact on the the on impact to represents axis completion (vertical housing) openingdate ofsupportive elativeto C ompletion (For MedianSize Development of48Units) ­ 1,000 feet away, unlike those less than 500 away,thanfeet less1,000 thoseunlike years after completion. That pattern might might pattern That completion. after years As seen in Figure D, which illustrates the the illustrates which D, Figure in seen As Moving farther away from the development, e id ht rpris ewe 50 and 500 between properties that find we valuebeforetheirconstructionwith began), (compared opens development the when ties up to 500 feet away, there is a slight slight a is there away, feet 500 to up ties result, result, the four percent discount neighbor feet from the development but within the the within but development the from feet feet away, dropa statistically significant see mat f nw uprie osn devel­ housing supportive new a of impact increase in the value of nearby properties properties nearby of value the in increase n au we te ulig s ne con­ under is building the when value in neighborhood). neighborhood). But once again, we find that prices prices then show a steady relative gain in the properties properties experienced before the sup - signifi statistically not is difference this but housing was built steadily narrows over time. steadily washousing built over narrows time. opment of median size (48 units) on proper on units) (48 size median of opment opens (compared to prices more than 1,000 prop­ to relative properties, nearby these of erty values in the comparison group. As a a As group. comparison the in values erty housing we opens, After cant. the supportive ­ sup the of effects positive the that suggest struction and when the supportive housing housing supportive the when and struction value the in rise significant statistically a see 5 4 3 2 1 0 elativeto

portive ­portive ing ­ing - ­

NYU’s Furman Center for Real Estate & Urban Policy 7 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City ­ hous feetfrom1,000 supportive the In sum, our research reveals that the prices prices the that reveals research our sum, In ih h spotv huig pie show prices housing, supportive the with - sup the from further but neighborhood the further away from the supportive housing housing supportive the from away further being are buildings the while somewhat fall from the site and initially are outweighed by increase relative to the prices of properties properties of prices the to relative increase in the years after the supportive housing housing supportive the after years the in of opponents properties arethe ing—which not suffer because of their proximity to the the to proximity their of because suffer not ues of homes near supportive housing do do housing supportive near homes of ues otv huig r dltd ate away farther diluted are housing portive properties. portive housing. Prices of properties 500 to to 500 properties of Prices housing. portive ­ neigh same the in but steadily then but open, they as and built e fetd y h development—increase the by affected be but but as the neighborhood grows comfortable accordingly suggest that over time, the val - the time, over that suggest accordingly opens, opens, relative to other properties located in hous supportive to closest properties of omnt uesns aot h housing, the about uneasiness community supportive housing. supportive supportive housing claim are most likely to to likely most are claim housing supportive comparison the to relative growth steady , a supportive housing development in the East Village, managed by BRC. by managed Village, development inthe housing East factory, asupportive glass borhood. Our results results Our borhood. ing may ing ­ Type ofSupportive The impact supportive housing has on prop on - has housing supportive impact The borhood Matter? We were somewhat surprised to find that find to surprised somewhat were We Density of the Neigh- Density of the PopulationDoes Housing Matter? the Size or Does Because of the diversity of supportive hous supportive of diversity the of Because which they are being built, we also wanted also we built, being are they which h dvlpet r h neighborhood the or development the to evaluate whether characteristics of either the effects on neighboring property values property neighboring on effects the ing developments and the neighborhoods in influence any effects the development has. development the effects any influence et nme o uis o te develop- the the whether as such characteristics, ment’s or units) of (number ment lower and higher density neighborhoods. density lower and higher affordable units for neighborhood residents. erty values also does not differ between between differ not does also values erty of number asidedevelopment acertain sets develop- the of size the on depend not do - NYU’s Furman Center for Real Estate & Urban Policy 8 The Impact of Supportive Housing on Surrounding Neighborhoods: Evidence from New York City The city, state, and providers of supportive housing must continue to maximize city,continue must housing to The supportive providers state, and of What Do What FindingsMean? These Th (between 500 and 1,000 feet) show a decline in value when supportive housingsupportive whenvalue in decline a showfeet)1,000 and 500(between F. Wagner Graduate School of Public Service at NYU. Since its founding in 1995, 1995, in founding its SinceNYU. at Service Public of School F.Graduate Wagner the positive effects of supportive housing and ensure that supportive housing supportive that ensure and housing supportive of effects positive the the Furman Center has become the leading academic research center in New York in b opnns f rpsd eeomns ht sup that developments proposed of opponents by tions City dedicated to providing objective academic and empirical research on the legal Our findings show that the values of properties within 500 feet of supportive of feet 500 within properties of values the that show findings Our residences remain good neighbors. But the evidence refutes the frequent asser frequent the refutes evidence the But neighbors. good remain residences fears about the supportive housing turned out to out wrong. be turned housing fears the supportive about increase steadily, then prices that but market realizes the opens, as first perhaps in the United States, with a particular focus on New York City. More information is a joint research center of the New York University School of Law and the Robert in the years after supportive housing opens. Properties somewhat further awayPropertieshousingsomewhatopens.yearsfurtheraftersupportivethe in housing show steady growth relative to other properties in the neighborhood the in properties other to relative growth steady show housing about the Furman Center found be can the Furman atabout www.furmancenter.nyu.edu. andpublic policy issues involving land use, real estate, housing and urban affairs sustained negative impact on neighboring property values. property negative impact on neighboring sustained , a supportive housing development in the Bronx, managed by Palladia, by developmentjerome inthe court Inc. housing Bronx, managed , asupportive e Furman C e Furman enter f or R eal Es tate an d U otv huig a a has housing ­portive r b an Policy -