The Edith Macefield house in Seattle.
In America, nothing can be said to be certain, except death, taxes, and apartments killing neighboring property values. Especially big ones that block sun and bring noise and traffic and transients who park on your street full of single family homes.
We’ve known this truth for almost a century now. The United States Supreme Court’s opinion in Village of Euclid v. Ambler Realty in 1926, a case regarding the legality of zoning, went out of its way to call out the effect apartments have on single family areas:
With particular reference to apartment houses, it is pointed out that the development of detached house sections is greatly retarded by the coming of apartment houses, which has sometimes resulted in destroying the entire section for private house purposes; that, in such sections, very often the apartment house is a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district. Moreover, the coming of one apartment house is followed by others, interfering by their height and bulk with the free circulation of air and monopolizing the rays of the sun which otherwise would fall upon the smaller homes, and bringing, as their necessary accompaniments, the disturbing noises incident to increased traffic and business, and the occupation, by means of moving and parked automobiles, of larger portions of the streets, thus detracting from their safety and depriving children of the privilege of quiet and open spaces for play, enjoyed by those in more favored localities — until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed. Under these circumstances, apartment houses, which in a different environment would be not only entirely unobjectionable but highly desirable, come very near to being nuisances. [emphasis added]
While only 68 cities across the country had a zoning ordinance by 1926 despite the 1922 Standard Zoning Enabling Act, 1,246 cities adopted one by 1936 on the back of the SCOTUS decision. While protection from noxious industrial uses was clearly a component of support for zoning, the spread of apartments and other daily commercial uses, and the fear of resulting impacts to property values, also played a big part.
In modern America, our cities’ comprehensive plans, zoning codes, and even city-adopted small area plans are scattered with language like “protect single family homes,” and muddy words like “stabilize,” “compatible,” and “character” – all with the intent of buffering or separating single family areas from more intense uses. Some examples from the Twin Cities region:
Lakeville’s Comprehensive Plan:
General Residential Land Use and Housing Policies
5. Protect Lakeville’s single family neighborhoods from encroachment by higher intensity non-residential uses or medium and high density residential uses with adequate separation and buffering.
Minnetonka’s 2030 Comprehensive Guide Plan, Land Use
The unique character of Minnetonka’s existing neighborhoods will be preserved, however, opportunities to broaden housing choice will be sought on appropriate vacant or underdeveloped properties, compatible with adjacent development.
…
1-394 Regional Corridor
Establish and promote neighborhood stability through rational land use planning and the establishment of spacing/buffering requirements between land uses of different intensity.
Minneapolis’ Comprehensive Plan (sampled text)
TSAs call for tools that maximize potential community development benefits of transit while also strengthening and protecting the surrounding neighborhoods.
Encourage the development of medium- to high-density housing immediately adjacent to Activity Centers to serve as a transition to surrounding residential areas.
Finally, the Uptown Small Area Plan of Minneapolis
The Core Activity Center and Urban Village South Sub-Area are proposed to accommodate more intense and taller development in order to protect the neighborhoods and encourage more consistent development patterns in the neighborhood transition areas and edges.
The proposed building envelope balances the need for development capacity with the need to protect low rise neighborhoods.
So pervasive and accepted is the notion that we need transitions and buffers from areas of activity to protect, enhance, and stabilize single family neighborhoods that Form Based Codes, a favored tool of pro-compact growth among urbanists, almost always separate intensity in graduations away from pre-defined activity nodes:
Image Source: Placemakers
What Does Research Tell Us?
The passages above and responses from the urbanist community are nice ways of saying what the 1926 case said. I’ve spent time with enough realtors over the last 8 years to know it’s a decently-held belief in the real estate business as well. But what does the research tell us? I’m going to cite more than a few studies, some of which are meta analyses of other studies, with relevant findings regarding property value impacts from dense development:
- The Impact of Multifamily Development on Single Family Home Prices in the Greater Boston (2005)
The trend in the index of the impact zone and the control area was compared in the years immediately preceding the permitting of the multifamily development and the years following completion of the development in order to determine if the multifamily development affected sales prices in the impact zone. In the four cases for which there was appropriate data, no negative effects in the impact zone were found. - Effects of Mixed-Income, Multi-Family Rental Housing Developments on Single-Family Housing Values (2005)
The empirical analysis for each of the seven cases indicated that the sales price indexes for the impact areas move essentially identically with the price indexes of the control areas before, during, and after the introduction of a 40B development. We find that large, dense, multi-family rental developments made possible by chapter 40B do not negatively impact the sales price of nearby single-family homes. - Examining the Impact of Mixed Use/Mixed Income Housing Developments in the Richmond Region (2010)
The home prices and assessments of nearby single-family homes were not adversely impacted by the presence of mixed income/mixed use developments. In fact, in many cases, the developments had a positive impact on those single-family neighborhoods. - The Property Value Impacts of Public Housing Projects in Low and Moderate Density Residential Neighborhoods (1984)
From both statistical analyses it is clear that properties in Portland, Oregon, gain value after the location of public housing proximate to them. … What is clear is that the value increase is quite small. - The Impact of Neighbors Who Use Section 8 Certificates on Property Values (1999)
If only a few Section 8 sites were located within 500 feet, we found a strong positive impact on property values in higher‐valued, real‐appreciation, predominantly white census tracts. However, in low‐valued or moderately valued census tracts experiencing real declines in values since 1990, Section 8 sites and units located in high densities had a substantial adverse effect on prices within 2,000 feet, with the effect attenuated past 500 feet. Focus groups with homeowners revealed that the negative impact was based on the units’ imperfect correlation with badly managed and maintained properties. - The Effect of Group Homes on Neighborhood Property Values (2000)
We attempt to replicate several previous studies, three of which found no evidence of neighborhood property values being affected by group homes. When testing these three models with our sample, we also found no evidence of group homes affecting property values. - Measuring the effects of mixed land uses on housing values (2004)
We conclude from this research that housing prices increase with their proximity to—or with increasing amount of—public parks or neighborhood commercial land uses. We also find, however, that housing prices are higher in neighborhoods dominated by single-family residential land use, where non-residential land uses were evenly distributed, and where more service jobs are available. Finally, we find that housing prices tended to fall with proximity to multi-family residential units.
If you’re counting at home, 5 of those 7 studies found dense development, including affordable and market-rate, had negligible or positive effects on home values. One study found negative impact, and one of the studies found mixed impacts depending on the existing values of the neighborhood public housing was added to. Heck, I even came across this study that says a landfill only reduced value for nearby properties by 3-7%. A landfill!
I’m sure there are more studies, and ones that show negative impacts from dense development. For the record, I went into the search in good faith and surfed pages upon pages of results on Google Scholar, with variations of the words “apartments,” “home values,” “negative impact,” “dense development,” in my searches.
Conclusions
Look, I’m not saying putting a 10-story safe house shading of someone’s beautiful sun room won’t diminish its value. In fact, that Portland study went on to say:
Gains in value, are, in fact, registered, but not equally among all nearby properties. Two separate functions can be seen to pertain: a disamenity function which is most intense at the site of public housing, and a neighborhood amenity constant which is added to all nearby properties.
It’s probably true that the properties immediately abutting a six-story apartment lose value most of the time, even if new residents or the new building itself brings an amenity to the neighborhood and raises aggregate values. Zoning and small area plans as we’ve conceived them are basically a prisoner’s dilemma response to this reality.
But homeowners forget how complicated and varied a purchase decision is. Whether a 6-story building is blocking views, diminishing privacy, etc are but small deciding factors to be weighed against things like a home’s size, finish quality, yard, garage size, proximity to jobs/shopping/natural amenities/transit, and on. It’s why people are willing to pay $3,000 a month to rent out tiny apartments with no view in Manhattan or San Francisco, or why someone would pay $300,000 for a 1,400 square foot home in South Minneapolis when one double the size could be bought for half the price in Elko.
“Incompatible”
So my question to everyone is: what are these transition zones and buffers protecting? What are the actual social goods to concentrating development in small pods or thin corridors that represent a tiny fraction of the city’s overall land rather than being more flexible? Should we let people in apartments live on the quiet side-streets single family dwellers desire even if the scale isn’t “compatible” with its neighbor? What do compatible and stabilize even mean? Just because we have the legal power to zone our city this way doesn’t mean we should. Especially when underlying concept supporting this separation may not even be true in the first place.
Exclusion of other uses from single-family neighborhoods is about status, not money.
“I don’t normally like to see books plugged by the author in Streets.MN comments. But when I do, the title starts with ‘Dead End: Suburban Sprawl…'”
This came at a good time.
Large apartments may or may not affect neighboring single family homes. Local evidence for when it doesn’t seem to affect could be found in Hopkins.
On Mainstreet there is an 11-story below market rate senior apartment, a few feet off the street in fact. Directly across the two lanes of Mainstreet were recently built a handful of town houses, on an irregular shaped lot, that sold for $250K–$350K.
Well, if you buy a townhouse you’re expecting to live in more density anyway. How would it affect the value if they had been single family houses?
A house across 6th Ave from this, 3 bedroom 1.5 bath, built in 1900 w/ 1,500 sq. ft. on a 6,500 sq. ft. lot, sold in December 2015 for $228K.
Another house across 6th ave from this, 4 bed 2 bath, 2200 sq. ft. on a 7,000 sq. ft. lot, also built in 1900, sold in Sept 2015 for $250K.
For not new construction, pretty good.
No. Would you agree with someone from Eden Prairie who lives in a neighborhood of .75 acre lots saying that since you live in Bloomington with 0.25 acre lots that you’re expecting to live with more density anyway and so you should get a 4 story apartment building next door rather than them? This whole mindset presumes that structures of differing density by a factor of X can’t exist near each other. No one is picking a home style and admitting that above density line Y it’s assumed I’ll have to live with dense construction nearby because, well, *I’m* dense. They’re making a tradeoff of location, price, size, style, quality, and amenities.
I guess I see a mammoth difference between single family houses and multi-family housing, much more than the difference between single family houses on .25 acre lots and single family houses on .75 acre lots, or the differences between townhouses and condos.
In our neighborhood, there are duplexes along Chicago, Bloomington and Cedar avenues (etc.) that are “multi-family housing” that are literally the same as nearby single family homes. They’re the same sort of house just divided in half.
And smaller apartment houses like this: https://www.google.com/maps/@44.9213789,-93.2523905,3a,75y,273.69h,83.86t/data=!3m6!1e1!3m4!1sOtuwBUHqwDOi1-bKV5UPZw!2e0!7i13312!8i6656
I don’t think the issue is single family vs. multi. I think it’s quality and attractiveness of the housing stock, whatever it’s character.
Building luxury condos next door isn’t going to hurt your property values (yeah, it might have other negative effects). But a crumbling, poorly maintained structure of any type would.
U creepin in my neighborhood, Adam?
I now live in your hood. Sort of. Just bit souther in North Richfield.
Well, you’re just wrong!
There is no singificant difference between single-family houses and multi-family housing, Monte. If you drove down my street and didn’t know any better, you might think you were looking at single-family houses.
They actually range from duplexes to 8-unit apartment buildings. I think there’s only 2 single-family houses on the entire block.
This is why I think true form-based zoning (all about the looks) makes a lot more sense than use-based zoning. If it looks like a single-family house, even if it doesn’t actually quack like a single-family house, nobody complains. It’s so easy to insert duplexes and triplexes and quadplexes seamlessly in a single-family neighborhood that most people don’t even notice when it’s done.
If you don’t like squarish brick buildings, well… I’ve seen single-family houses which are square, brick, three-story buildings, you know. They’re pretty sweet. I personally think they should be allowed, but I *understand* the claims that they don’t match “neighborhood character”.
I can see how having a mixed use development, say a block away, wouldn’t affect house values. There wouldn’t be balconies directly overlooking my backyard, and buyers that are afraid of the type of tenants that live there are balance by the buyers that would love to have a coffee shop within an easy walking distance. Personally it doesn’t matter to me one way or another but I know some people would have a preferrance.
I’m confused at the conclusion. A six story apartment next door to my house would lower values, but then again it wouldn’t if I had granite counter-tops because some buyers want that more than privacy and sunlight?
Yes, your summation of the conclusion is exactly right. You personally may struggle if you lost privacy or sunlight from you yard, because those may have been things you personally valued in your home when you bought it. Proximity to a park or transit or jobs or shopping maybe mattered to you less. So it’s still possible that the value of you home would raise if an apartment with a grocery store or restaurant in it was built next door even if you feel you quality of life declined.
And, even though a couple studies admit property value decline directly abutting a project, the magnitude of the drop is almost always quite small, talking 1-2%. Even if you’re using your home as a primary means of investment, over a 30-year timespan a difference of 1-2% is very marginal, and I guess I’d say that letting more people live where they want to is a net societal gain larger than protecting someone’s marginal gain in home values.
There’s more to life than property values.
This seems to be a particular hobby horse of yours Alex. You really not get or are you trolling?
I lived in great old house in a nice St Paul neighborhood that had a 20-25 unit apartment building within 500-2000 ft. We moved. And when we moved it was a priority to us (not “the” but “a”) that the new neighborhood didn’t have a similar situation. I won’t expand but I could, at length. Just want to highlight the reasons had nothing to do with property value
You are objecting to a post that is specifically tackling one of the most common objections to large apartment buildings because it isn’t one of your specific objections?
I was at a public meeting about a proposed tall apartment building and this was specifically the loudest complaint by a few. That the height will lessen privacy and increase shadows that will impact property values. Exactly that. Second to it is it will make traffic worse, even though it will be built adjacent to a future LRT station and is designed for those desiring a car-free/car-light lifestyle.
Sorry I should have been more clear. I was sort of agreeing with the original comment that it wasn’t about the money. I understand people say its about the money, I believe your experience. I think they are lying.
I’m curious what the reasons were.
Hi Bill,
Sorry it took a while to respond.
Guess I’d start with the fairly minor:
http://seeclickfix.com/issues/1500002Shared%20from%20SeeClickFix%20for%20Android
I finally reported it because we were trying to sell the house but without fail every month end, there were heaping piles of garbage overflowing the dumpsters. Truly depressing to walk out the front door and see this.
I would call this more of a major issue:
http://www.twincities.com/2012/12/30/st-paul-sexual-assault-reported/
My next door neighbor pulled into his driveway one evening to the naked women staggering across the street to his home. I was there the next day when the same guys rebroke into the apartment to do god knows what and the dozen cop cars showed up.
In between it was the half dozen times standing on my front yard wondering whether I should call the jobs because the yelling and screaming constituted a genuine domestic disturbance or if it was just Saturday night
It was the lying in bed wondering whether I had put away all of my kids toys in the front yard so they weren’t stolen the next morning,
It was the leaving the house for the weekend and hoping the home wasn’t broken into again despite the alarm system.
I could go on.
I loved our house. Our home owning neighbors were great. Some of the nearby renters were too. I’m glad I bought the house. I’m glad we lived there. I couldn’t wait to leave for a lot of reasons, one of which were the nearby renters.
I hope that was the question. I guess the other reasons we moved were to be closer to the kids school in a neighborhood with more kids in a bigger house. We’re still in the city
If I were to rank them
1) closer to school
2) more kids (probably related to #3)
3) better neighborhood
4) bigger house
Thanks for the reply. Yeah, neighbors can be problematic sometimes, no doubt. My street is mostly fine, and certainly my apartment building is full of nice people like myself. Though people still say some eye-popping things about “those people” the apartment building on the corner, the list of real drama moments is small in my experience. Chasing kids off the porch once. A police incident once, with 6 cop cars on the street trying to find someone. Loud shouting and cursing when someone has a fight.
(Some stories of other quirks from people on my block or across the street, like the weird snake dude, i.e. often has a snake, living in the house across the street with his weird friends that I’m pretty sure do drugs almost constantly.)
But that’s like 3 things in 2.5 years. Not too bad if you think about it.
I guess I just disagree with the premise behind your post, Paddy.
The assumption here is that social ills and nuisances are a natural consequence of building form. I think this is incorrect. Social ills and nuisances are caused by the inhabitants of buildings, not by the buildings themselves. This notion that some structures are inherently parasitic is what led to the specious reasoning behind mid-century “anti-blight” campaigns that demolished many historic 19th century structures, largely in the Gateway district downtown. Because obviously three-story brick buildings with ground level retail and upper-floor residential units are by definition breedings grounds of vice and iniquity. The Warehouse District and Mill District today are testament to the illogic of this view where density is somehow pathogenic: these formerly sooty industrial sites are now some of the most expensive residential real-estate in the metro area.
If apartments themselves caused crime and nuisance, then the Upper East Side in NYC or Back Bay in Boston would be slums, given their high density. But these are where the 1/10 of 1% reside – the superrich. Michael Bloomberg lives in a townhouse (albeit a fancy one). Obviously dense buildings themselves don’t create social ills; instead, it is the the social fabric of the inhabitants of any kind of building that sets the tenor of a neighborhood.
I grew up in the Hale/Page/Diamond Lake neighborhood – a lazy, leafy part of south Minneapolis with good schools and low crime. When I was 10 years old, I leaned my bike against the steps while I ran into the kitchen one summer day, and when I came back 5 minutes later it had been stolen. Not an apartment building for blocks in any direction. Did single-family-homes somehow cause the theft of my bike? That’s absurd. Anecdotes are great, but often misleading.
So, in sum: I just reject this idea that the headaches you cite were the result of an apartment building. Why did the inhabitants of that building act in the ways you describe? I have no idea. But I know it probably wasn’t because they had leases instead of mortgages, shared walls, and lacked their own yards.
Paddy: never lived in a bad-neighborhood poor rural area, eh?
All single-family housing. Garbage everywhere; piles of trash and rusted out cars on the lawn. Meth houses. Screaming and yelling. Drunken vandalism. Drunk driving.
In single-family “owner-occupied” housing, mind you. I know people who’ve lived in these places.
By contrast, I currently live with nothing but renters, mostly in multifamily buildings on all sides, and they’re all extremely well-behaved. Maybe — just consider this — maybe the quality of the people doesn’t have anything to do with whether they’re renting, or whether the building is “single-family”?
You’re right, not everything in life can be quantified by home values. But it’s not me making the case that noise, sunlight/shadows, traffic, parking, and neighborhood character change is being capitalized into home values.
I agree this capitalization doesn’t play into every person’s situation, and can’t be the only way we govern. But when talking about land uses, if you strip away the assumption that dense construction ruins home values, we’re left with people’s claims about what they think a neighborhood should look/feel like vs. letting dozens of extra actual humans live in that neighborhood. I know which one I’ll side on every time.
Fair enough. I get what you’re saying. I think people who highlight the marginally untrue/true “declining home value” canard/truism just don’t want the extra people in their neighborhood period.
That’s true whether its in San Francisco, New York, Upton/South Minneapolis or Highland/Mac/Groveland.
Thanks, Alex, this is really good. I have a paragraph from “The Homevoter Hypothesis” by William Fischel* that might illuminate the economic perspective of people who aren’t opposed to development per se but just think it needs to happen responsibly and far away from them.
“NIMBYism is weird only if you think solely about the rationally expected outcome from development. NIMBYism makes perfectly good sense if you think about the variance in expected outcomes, and the fact that there is no way to insure against neighborhood or community-wide decline.” (p. 9-10)
So people will rationally work to prevent a development that has a small chance of reducing the market value of their real estate portfolio (or “destroying the character of the neighborhood”), even if the expected impact of the development on their property value is neutral or slightly positive. They’re managing risk.
*I think Fischel is right about the mechanics of our system of urban growth control, but wrong about its merits.
I think this is what I was getting at with the prisoner’s dilemma comment. People realize there may likely be a neighborhood-wide benefit, even a benefit to them personally on a day-to-day basis via added amenities, but are mitigating the risk of hyperlocal impacts.
but there’s no way to guard against community-wide decline even (or maybe especially) with no change in development. People remodel single-family homes in ways that destroy privacy and block sunlight, and changes totally outside your neighborhood – national or worldwide recessions, region-wide employment losses, statewide decisions about college campuses or highways – can all make a neighborhood fall apart. NIMBYism may make people feel like they’re managing risk but it doesn’t seem like it really works that well – blocking growth and investment might be just as much of a risk.
Maybe it’s just me, but the decline in family size leading to a shrinking urban population in SFHs, and the need for more housing along transit corridors for equity reasons, especially when combined with the need to reduce CO2 emissions, far outweigh the “nuisance” factors outlined here.
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I sympathize with Paddy. I used the zoning codes to help drive out a duplex that was grandfathered in our neighborhood zoned single family.
Was there anything really wrong with having a duplex on that lot? No, nothing at all. The problem was the awful landlord who didn’t care one whit about his terrible tenants who drove at least three of our neighbors to sell their homes and flee for other neighborhoods or the suburbs. The tool we had was zoning and the expiration of his non-conforming use after standing vacant (and burned out) for over a year. The neighbors got together and used the blunt tool we had to force him to sell out and leave our neighborhood.
(a) There should be other tools.
(b) What do you do when the jackass, dangerous neighbor is a single-family homeowner? Which happens all the time especially in the rural areas.
Thanks for the interesting post. Here in Cambridge, MA, we’re seeing an argument against big new apartment buildings for the opposite reason: people say building luxury buildings actually increases rents and property values!
See, that’s probably actually *true*, but it’s still a stupid argument.
After all, if you make sure that your neighborhood sucks, that the buildings are all in bad condition, and that there are big “STAY OUT” signs all over it, that’ll keep rents down as people leave in exasperation and move to more welcoming places. And that’s what prohibiting new high-end construction does.
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Just for reference? My house is entirely surrounded by multifamily apartment buildings on all sides. Some of them were former single-family houses but they’ve all turned into rentals over time.
My property value seems to keep on going up.
Same all over my town: an apartment building next door raises the value of your property.
In fact, what single-family zoning does is to REDUCE property value. This may actually be desired by the owners of the single-family houses, but it’s important to know what the facts are.