Addressing Real Issues with Real Facts

mixed use housing

Special: Does Mixed-Use Housing Decrease Home Value?

in Addison Grove/Addison Texas Council/Economics/Infrastructure/Sam's Club by

Ever since plans were approved to build mixed-use housing on the old Sam’s property, rumors have been abundant. Most of the negative rumors have dealt with the apartment phase of the project. Perhaps the most disturbing is the latest rumor being touted by, of all things, a resident realtor. “You’d better put your home on the market now before the values crumble,” one resident was told by this realtor.

To discern some reality about the impact of multifamily on single-family homes, Facts Matter decided to do a little research and provide you with some factual information.

Does Mixed-Use Housing Decrease Your Home Value?

According to research, the simple bottom line is—“large, dense, multi-family rental developments do not negatively impact the sales price of nearby single-family homes.” This was the conclusion of case studies reported by the Harvard University Joint Center for Housing Studies and backed up by a longtime Dallas realtor.

According to the Harvard study, lack of information and exaggerated fears feed the misconceptions. To provide some factual information to counter these misconceptions, we decided to share with you some of the research from this Harvard University Joint Center for Housing Studies report. Also, to bring some insights to the situation from a local perspective, and to avoid any partiality from any Addison realtors, we reached out to Virginia Cook Realtors, a highly respected Dallas real estate agency.   There we interviewed Mayo Redpath who has been selling real estate in the area for the past 28 years.

Resistance vs Reality

It’s little secret that resistance to multifamily rental housing has been a growing phenomenon in communities around the country. The resistance has even spawned it own vocabulary with such acronyms as “LULUs” (Locally Unwanted Land Users) and “NIMBY” (Not In My Backyard). Those resisting have been referred to as “CAVEs” (Citizens Against Virtually Everything) who want “BANANAs” (to Build Absolutely Nothing Near Anyone).

Setting these silly acronyms aside, the Harvard study points out that the reality is that the opposition runs smack up against a powerful demographic trend. As the population growth continues at a high level it will require considerable new residential construction. Add to that the fact that growth in individual households will be even greater than population growth itself. In 1960 single person households made up only 13 percent of all households, while married couples with children made up another 44 percent.

Today, married couples without children, is the most common type of household. Thus, the Harvard report states, the demand for new housing units is likely to increase faster than the population itself is projected to grow. The study projects that between 2005 and 2030, the number of households will rise by almost 30 percent—that is, 33 million new households.

The study further suggests that by 2030 the number of additional housing units needed is actually greater than 33 million because an estimated 17 million existing housing units will fall out of housing stock due to deterioration or destruction. Thus, some 50 million new housing units will have to be added to the stock between 2005-2030. Multifamily rental housing will play an increasingly important role in providing needed housing.

Redpath agrees with these projections. “We have an aging population with the Baby Boomers and they want to sell their big houses. They want to get out of the maintenance so they’re looking for townhouses or they’re looking for apartments. We’re seeing a lot of them rent apartments temporarily for a year or two until they decide what they want to do,” she said. She cites the Estancia townhome apartments in the Prestonwood section, which borders on Addison between Arapaho and Beltline, as a perfect example. “It’s very, very popular,” she said. “People can walk to the theatre, walk to restaurants. I’ve had families recently that have moved there. I think the perception of people who are living in apartments has changed. It’s a higher grade of tenant.”

Attitudes Reflect Opposition

Opposition to multifamily housing is expressed most fundamentally in attitudes. Those attitudes are generally established based on misperceptions, the Harvard study found. A significant amount of resistance is based on lack of information, misperceptions, or exaggerated fears of project impact. Anti-apartment stakeholders rely on these unproven arguments:

  • Multifamily apartments lower the value of single-family homes in the neighborhood.
  • People who live in apartments are less desirable neighbors and more likely to engage in anti-social behavior.
  • Higher-density housing creates traffic congestion and parking problems.

Setting the Record Straight:

To bring reality to these arguments, here’s what the Harvard study found:

Opponents of multifamily housing often claim that apartment residents impose higher expenditures for local government services but the study found when it comes to infrastructure, high-density development actually is more efficient than low-density development. By their very nature, longer sewer lines and sprawling utility (water, gas and electric) supply systems are more costly in single-family areas. In single-family areas, local governments must provide fire and police protection over a larger area. By contrast, compact development benefits from economies of scale and geographic scope—and these benefits are large. Thus, rather than imposing a greater burden on local governments, higher density developments like apartments are actually more fiscally prudent than traditional suburban sprawl.

Traffic: One of the major complaints heard regarding the Addison Grove project dealt with traffic. That, according to the Harvard study, is an unfounded concern also. The study found that on average, apartment residents own fewer cars than single-family homeowners: single-family homeowners average two cars per household compared with only one for the apartment residents. Also, single-family housing generates more automobile trips per household as evidenced in the table below, reproduced from the Harvard report:

Automobile Trips Per Housing Unit
Single-family detached Apartment Difference
Weekday          9.57    6.72    42%
peak AM hour          0.77    0.55    40%
peak PM hour        1.02    0.67    52%
Saturday      10.10    6.39    58%
peak hour        0.94    0.52    81%
Sunday        8.78    5.86    50%
peak hour        0.86    0.51    69%


The study also found that on weekdays, a single-family detached house generates 42 percent more trips than does a unit in an apartment. The difference is even greater on the weekend: 58 percent more trips on Saturdays and 50 percent more trips on Sundays. The difference is seen not only in totals, but also at the peak hours, morning and afternoon, weekdays and weekends. By any measure it is clear that single-family houses generate more automobile traffic than apartments or any other type of housing.

Redpath agrees with the Harvard study and also points out that retail also brings more traffic than apartments. “It’s just like the traffic at that Whole Foods has brought to the former Sakowitz Village,” she points out. “The traffic there is much more than if that was an apartment.”

Finally we come to the personal investment issue—Property Values. The fear that housing density will hurt property values is primarily based on anecdotes the study states.   Most research, however, has come to a different conclusion—multifamily housing does not cause neighboring property values to decline.

Extensive case studies in six research works measured a variety of relevant characteristics, including house price, price per square foot, house price appreciation, time on the market and ratio of sales price to asking price in order to assess “the worst-case scenarios of multi-family intrusion into a single-family neighborhood. “ Their conclusions:

“We find that large, dense, multi-family rental developments do not negatively impact the sales price of nearby single-family homes.” (MIT Center for Real Estate)

Once again, Redpath agrees. “I don’t think your property values are going to go down [with the Addison Grove project] because the apartment is surrounded by townhouses,” she said. “To me your property values would go down more if you had another big box store there or retail.” The townhouses, she notes, are buffers and “the people who buy the townhouses know they are going to be adjacent to apartments.” Plus, she ads, “those apartments are going to be high rent.”

So why, then, we asked Redpath, would any realtor encourage anyone in the nearby neighborhood to put his or her home on the market? She laughs, and with a coy smirk says, “It seems like that’s self-serving, not based on facts because right now we are in a sellers market. There is not as much inventory so realtors are looking for listings right now.” This was confirmed in a June 11 article written by Dallas Morning News Real Estate Editor, Steve Brown who wrote, “In the Dallas-Fort Worth area, the inventory of pre-owned homes up for sale is about a third of what’s considered normal market.”

Overall Conclusion

The Harvard study concludes that available research is fairly strong that multifamily rental housing: 1) does not impose greater costs on local government; 2) does not increase traffic and parking problems; 3) when well-designed and appropriate to the right neighborhood, does not reduce (and may even enhance) property values; and 4) does not inherently attract residents who are less neighborly or more apt to engage in (or attract) criminal activity.

According to the study, the bias against multifamily rental housing must be overcome if we are to meet our housing needs in an environmentally sustainable and economically realistic manner. “Misconceptions, exaggerations and unfounded beliefs contaminate civic discussion about apartment development.”

Facts do matter. So don’t believe everything you hear—even if it’s from a resident realtor.

Photo courtesy of La Citta Vita via Flickr

The Facts Matter Website is made possible through the generous donations from Angels of Addison.

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