Supportive Housing and Neighborhood Property Value Externalities

We analyzed impacts on single-fam- institutional settings. As part of the nationily home prices of eleven, small-scale supportive wide “deinstitutionalization” movement housing facilities announced in Denver during beginning in the 1970s, chronically men- 1989–1995.Using a difference in differences econo- tally ill, developmentally and physically dis- metric specification, we found that these facilities abled, non-violent produced a positive impact on house prices within offenders, recovering 1,001 to 2,000 feet.We attributed this effect to coun- substance abusers, and frail elderly inditervailing externalities (building rehabilitation vs. viduals have increasingly been domiciled resident behaviors) that vary in their spatial extent. in small-scale facilities located in residen- Supportive housing facilities were systematically tial neighborhoods. This “normalization” sited in neighborhoods with declining relative of residential environment, coupled with prices compared to elsewhere in the census tract. on-site and on-call specialized care, is seen This location bias led a conventional econometric as therapeutic bymany policy makers (New- specification to erroneously estimate a negative property value impact from supportive housing.