Studies on Halfway Houses

Policy Brief: Do Halfway Houses and Community Corrections Facilities
Cause Property Values to Decrease?

MYTH: Opening a community based facility in my neighborhood will decrease the value of my home.

FACT:  Housing values on streets with halfway houses and community based facilities around the District have continued to increase significantly over the past five years.

"My quality of life has plummeted. My property value has suffered. I can't sell my property as long as I have people on assisted housing living next door... I will get rid of those people."-A DC-area resident speculates on the impact of having a drug and community based treatment facility next door, The Washington Post, April 20, 1996.

Summary

Some DC residents fear that their housing values will decrease if a halfway house or other kind of community based facility opens that provides rehabilitative services to troubled populations. However, as housing value trends show, actual sale prices have continued to rise in neighborhoods within the District where these facilities operate.

In order to determine the impact the presence of these facilities have on the resale values of homes, D.C. Prisoners' Legal Services commissioned The George Washington University, Center for Excellence in Municipal Management and the Center on Juvenile and Criminal Justice to undertake a study of housing values over the past five years (from December 1, 1997 through March 7, 2002). This brief analyzes and summarizes property values and resale trends for street addresses within a six to eight block radius of halfway houses and community based facilities in Northeast, Northwest and Southeast.

Main Findings

The housing value data reveal three important findings:

• All of the neighborhoods with halfway houses and community based facilities experienced an increase in housing values for single family homes between 1997 and 2002, both on the street and within the zip code where the facilities are located over the past five years. This finding was true in neighborhoods in Northwest, Northeast and Southeast. In some neighborhoods studied, the houses directly around facilities had greater growth than those in the zip code as a whole. In other neighborhoods, houses directly around facilities experienced less of a growth in value than in the neighborhood as a whole.
  
• Even homes that sold within a one-block radius of the facility experienced an increase in housing values over the past five years. Some homes within a couple of blocks of a facility actually doubled in value, or rose as much as $100,000.
  
• Community based facilities have not contributed to a decrease in housing values in the neighborhoods where numerous facilities are located over the past five years.

Methodology

The data on housing sale prices for single family homes in the District was retrieved from "Property Views," a data system used by realtors in the D.C.-metro region to track housing resale prices by street address, street name, ward, or zip code. Researchers surveyed home sales between December 1, 1997 and March 7, 2002 for single-family homes within a multi-block radius for the exact street where the facility is located for each of the facilities. Subsequently, all homes within the zip code where the facility is located were queried to determine whether the trends in housing values are consistent for streets with these facilities in comparison to all home sales within that zip code.

First, all home sales within a six to eight block radius from the facility are listed in chronological order for the particular street where the facility is located.

Second, average sale prices by year were calculated for each year from 1997 to 2002, or 2001 if there were no home sales in 2001. Some streets did not have any home sales in a given year. The significant findings from the existing housing data are discussed.

Then, all home resales (homes that have sold more than once over the past five years) were separated out. This allows researchers to look at the sale prices of the same property over time.

Subsequently, to determine whether the trend in housing values is consistent with that of the zip code where the facility is located, houses which sold within the zip code where the facility is located were randomly selected and averaged using the Property Views system.

Following are the street addresses of 7 halfway houses and 2 community based facilities, which serve provide services to DC residents and the trends in property values over the past five years.

Data Limitations

The data received from Property Views system lists the amenities, such as number of bedrooms and bathrooms for each of the properties, therefore it is not possible to account for the numerous reasons why a property's value may increase, such as a home renovation, a commercial or retail development opening nearby, or a new metro stop opening in the neighborhood. Second, prices were not controlled for amenities such as the number of bedrooms and bathrooms, whether the property has a garage, or square footage. However, averaging all of the values for the home sales included in the samples should provide a reasonable explanation of housing value trends. It should also be cautioned that there were few home sales in most of the neighborhoods over the last five years to use in this study. Last, home values were not controlled for inflation or interest rates.

Dupont Circle Neighborhood

On the 1900 block of this 16th Street, NW, three blocks away from The Green Door, a three-bedroom/two bath home sold for $239,000 in September 1997. It resold in April 1998 for $262,000, an increase of 10% in just seven months.

Two homes within three blocks of the facility sold for over $1 million and over $2 million respectively in 2002. The average increase in price of the homes sold between 1997 and 2001 is about 447%.

On the 1600 block of 19th Street, NW, three blocks away from The Trudie Wallace House, a five-bedroom/four bath home sold for $359,900 in March 1997. It resold in August 2001, for $496,000. A five bedroom/five and a half bath home on the 1800 block, just a half-block away sold for $565,000 in March 1997 and resold for $880,000 in January 1999. Another home on the 1800 block, just one block away sold for $630,000 in November1996 and resold for $963,100 in November 2001.

Overall average growth in value for single family homes on this street, as indicated by home sales between March 1997 and November 2001, is 59%.

20009 Zip code

Overall growth for all single family homes in the 20009 zip code as indicated by sales between December 1997 and February 2002 is 119%. The greatest change is attributed to the average change in values between 2000 and 2001 of $270,000 for a single-family home.

Capitol Hill Neighborhood

On the 600 block of 14th Street, NE, two blocks away from the facility, a three bedroom/1 bath home sold for $43,000 in November 1997. It resold in December 2000, for $80,000Ñalmost double the price of three years ago. Another three bedroom/1 bath home on the same block, just two blocks away from the facility, sold for $83,000 in 1999, and resold for $144,000 in March 2000, less than one year later.

Overall average growth in value for three to five bedroom single family homes as indicated by home sales between April 1997 and February 2002 is 190%. This change is attributed to the change in housing values on this street from an average of $69,000 in 1997 to an average of $200,000 in 2002.

On the 1000 block of G Street, NE, two blocks away from the facility, a five bedroom/2.5 bath home sold for $125,000 in May 2001 and resold just one month later for $173,500. Another home on the 1200 block of G Street sold for $59,900 in May 1997, and resold in November of the same year for $130,000. Lastly, a three bedroom/2 bath home on the 1400 block of G street, NE sold for $99,900 in September 1997, and resold for $158,600 in January 2001.

Overall average growth in value for three to five bedroom single family homes as indicated by home sales between May 1997 and June 2001 is 65%. This change is attributed to the change in housing values on this street from an average of $97,000 in 1997 to an average of $160,000 in 2001.

On the 1300 block of Pennsylvania Avenue, SE, one-half block away from the facility, a three bedroom/1.5 bath home sold for $43,500 in November 1997 and resold in January 2001 for $179,500. Another home on the 1500 block of Pennsylvania Avenue, SE sold for $115,000 in September 1998, and resold in March 2001 for $150,000.

Overall average growth in value for three to five bedroom single family homes as indicated by home sales between May 1997 and June 2001 is about 159%. This change is attributed to the change in housing values on this street from an average of $78,000 in 1997 to an average of $202,000 in 2001.

20002 and 20003 zip code

Overall growth for all single family homes in the 20002 and 20003 zip codes as indicated by sales between December 1997 and February 2002 is 218%. Excluding the homes sold in the first two months of 2002, the prices increased over $235,000 from 1997 to 2001.

Logan Circle/Shaw Neighborhood

On the 1300 block of 8th Street, NW, two blocks away from the Efforts X Convicts facility, a 4 bedroom/2.5 bath home sold for $255,000 in January 2001 and resold in September of the same year for $318,000. * These two streets were combined since they are in the same neighborhood within three blocks from each other.

Property values on these two streets, decreased between 1998 and 1999, then began to increase in 2000. In 2001, the average property value had increased by 43% from the 1997 average. It is difficult to assess the reason why values decreased then peaked in 2001. It could be that the houses sold were in poor condition, or that the neighborhood had not yet become desirable.

20005 zip code

Sale prices for the 20005 zip code had a similar trend with values dipping between 1998-2000 below the value in 1997. Overall growth for all single family homes in the 20005 zip code as indicated by sales between March 1997 and February 2002 is about $108,000. The average percentage increase for single family homes was 61%. The prices increased over $230,000 from 1997 to 2001.

On the 3500 block of 16th Street, NW, a four bedroom/two bath house sold for $224,00 in March of 1997, and resold for $369,000 in August 2001. On the 1900 block of Park Road, a block and a half block away from the Shaw II, a three-bedroom/1.5 bath home sold for $210,000 in June 1997. It resold in July 2001 for $364,500.

Overall average growth in value for single family homes as indicated by home sales between May 1997 and February 2002 is about 140%. The overall change in value between 1997 and 2002 is $295,000.

Overall growth for all single family homes doubled in the 20010 ZIP CODE as indicated by sales between February 1997 and January 2002.

The production of this policy brief was supported by a grant from the After-Prison Initiative of the Open Society Institute. Lisa B. Feldman, Research Fellow, The George Washington University Center for Excellence in Municipal Management, was the principal researcher for this brief, which was produced by the Center on Juvenile and Criminal Justice. The brief was commissioned by D.C. Prisoner Legal Services Project, a public interest law firm and policy organization serving people under criminal justice control and their families. A longer version of this policy brief, detailing the methodology used, can be found on-line at http://www.cjcj.org/.

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• The number of crimes committed has not changed significantly over the past five years in neighborhoods that house community based facilities and halfway houses. The numbers of overall crimes in neighborhoods with community based facilities and halfway houses are actually quite low over the past five years.
• Crime trends in neighborhoods with community based facilities and halfway houses are similar to those in neighborhoods with services that people would not normally associate with crime.