Do Homeless Shelters Hurt Property Value? NYC Study Sparks Debate

NEW YORK — City officials and advocates lobbed questions and criticism at a new study suggesting New Yorkers may be right to worry about homeless shelters driving down their property values.

Mayor Bill de Blasio's office — along with advocacy groups and service providers — contend the study by the city's Independent Budget Office wrongly concluded that the presence of a homeless shelter caused home prices to drop when it only shows a correlation between those two things.

"This report is not only wrong on the facts, it’s morally indefensible," de Blasio spokesperson Avery Cohen said in a statement. "Anyone who would withhold help from a family in need to make a bigger profit reselling a home has to take a hard look in the mirror."

Residences closest to homeless shelters in Manhattan sell for about 7 percent less money than similar homes slightly farther away, the Independent Budget Office found after analyzing nine years' worth of data on real estate sales.

The budget office performed the analysis at the request of Manhattan Borough President Gale Brewer, who said it can help city officials respond to homelessness based on empirical evidence. Brewer, a Democrat, has criticized Mayor Bill de Blasio's current plan to address homelessness, which relies on the construction of 90 new shelters.

The findings "confirmed the common assumption that residences located closer to shelters sell at lower prices than similar residences located further away," the office wrote in the study published Wednesday.

But the de Blasio administration and advocates for homeless people immdiately criticized the study's findings and questioned its methodology.

Three groups — the Coalition for the Homeless, Homeless Services United and the shelter operator Win — called on the Independent Budget Office, or IBO, to retract the report, saying it is riddled with errors and reinforces harmful stereotypes.

Win President and CEO Christine Quinn — a former City Council speaker who ran against de Blasio in the 2013 mayoral election — called the report "statistically dubious." More rigorous research has shown that New Yorkers "welcome shelters in their neighborhoods and recognize the importance of providing shelter for homeless people in need," she said.

"Stoking NIMBYism with a fatally flawed report that casts shelters as a blight rather than a public good (and indeed a legal requirement) only serves to further stigmatize and discriminate against the victims of our city's affordable housing crisis," Giselle Routhier, the policy director at the Coalition for the Homeless, said in a statement.

IBO spokesperson Doug Turetsky stood by the report, saying the office was forthright about its methodology and the limitations of the data it used.

Among those limitations was the fact that the city's Department of Homeless Services does not have a full list of when the city's shelters opened, he said.

"Rather than grandstanding and making false statements about our report (a familiar tactical ring?), we encourage those who dispute our findings to roll up their sleeves and do the work," Turetsky said in a statement.

The IBO compared the sale prices of homes in Manhattan within 500 feet of a traditional "congregate" homeless shelter to those located 500 to 1,000 feet from such a shelter. The analysis was based on Department of Finance data for the sales of condominiums and one-, two- and three-family homes from 2010 to 2018.

Homes closest to a shelter for adults went for an estimated 7.1 percent less than a similar home more than 500 feet away sold at a similar time, the study says. Homes near shelters for families with children saw a slightly smaller price drop of 6.4 percent, according to the report.

The IBO says the effect was compounded for residences near more than one shelter. Homes within 1,000 feet of at least two shelters sold for 17.4 percent less than those within 1,000 feet of just one shelter, the study says.

The analysis accounted for other factors that can influence home prices, the IBO says. The office also acknowledged that a lack of ideal comparisions between similar homes, along with a lack of information about when the city's shelters opened, limited the study's methodology.

But city officials and advocates said the study's limited controls that did not address how of the building's age, zoning, views and other factors affect property values. The IBO also misstated facts about the shelter system and omitted data that contradict its findings, the Coalition for the Homeless charged.

"(I)t’s hard to imagine this report tells the whole story or even a marginally useful one," Homeless Services United, a coalition of nonprofit service providers, said in a statement.