[This is a crosspost from our LinkedIn Community]
The concern is understandable. For most adjacent property owners and even those a quarter-mile down the road, a the fear that new multifamily housing might erode years of equity is viscerally real. Here’s a brief overview of what recently published, peer-reviewed research has to say.
What the Research Actually Shows
The most comprehensive studies consistently find that well-designed multifamily development either has no negative effect on surrounding property values. In some cases, it actually increases them.
A 2021 study by the Kem C. Gardner Policy Institute at the University of Utah analyzed single-family home values in suburban Salt Lake County from 2010 to 2019 and found that homes located within one-half mile of newly constructed apartment buildings experienced higher average annual price appreciation (10.0%) than homes located farther away (8.6%). The study concluded that “apartments built between 2010 and 2018 have not reduced single-family home values” and that proximity to new apartment construction was associated with +1.4 percentage points in annual appreciation.
A longitudinal study by the Massachusetts Institute of Technology Center for Real Estate (Pollakowski, Ritchay, and Weinrobe, 2005) examined seven high-density mixed-income rental developments in suburban Boston, analyzing 36,000 property transactions over a 21-year period. The researchers concluded that “the introduction of large-scale, high-density mixed-income rental developments in single-family neighborhoods does not affect the value of surrounding homes,” and stated explicitly that “the fear of potential asset-value loss among suburban homeowners is misplaced.”
The Harvard Joint Center for Housing Studies, in a 2007 research report titled “Overcoming Opposition to Multifamily Rental Housing,” reviewed the existing body of literature on this subject and concluded that when multifamily development is “well-designed and appropriate to the neighborhood, [it] does not reduce (and may even enhance) property values.” The report then noted research by Virginia Tech University that found that apartments with attractive design and landscaping increased the overall value of nearby single-family homes.
A literature review compiled by The Urban Land Institute in 2023 surveyed dozens of U.S. studies on this topic and found that “not a single U.S. study has found that introducing gentle density negatively impacts values of proximate single-family homes.” ULI similarly concluded that “these studies have shown either no impact or even a slightly positive impact on appreciation rates.”
Design Matters More Than Density
The consistent thread is the observation that how housing is built matters more than whether it’s built. Developments with thoughtful architecture, professional landscaping, and quality management integrate seamlessly into existing neighborhoods. The goal should be to improve that quality of any community we build in or nearby. Last year, Murphy celebrated the grand opening of Valley River Apartments: 56 units of affordable housing with rents starting at $520 per month, featuring mountain views, modern finishes, and amenities that rival market-rate developments.
Valley River exemplifies what research predicts: housing that has the potential to raise, rather than diminishing, its surroundings. Mayor Tim Radford captured the broader significance at the ribbon-cutting ceremony: “This is more than bricks and mortar. It’s about building opportunity, stability, and a stronger future for the people who call Murphy home.”
The property value question, important as it is, actually understates the economic case for thoughtful housing development. Communities with adequate housing for their workforce attract and retain employers. Valley River’s residents include the exact workforce that keeps Murphy functionally moving forward. When towns have stable housing, employee turnover decreases, businesses benefit, and the larger area economy gets more resilient.
The Western North Carolina Housing Partnership (WNCHP) is a nonprofit affordable housing developer. Since 1994, we’ve been investing in communities where housing can make a meaningful impact on the quality of life for those facing more challenging economic circumstances.
Ian Bryan | ian.bryan@wnchousing.org | (828) 283 – 0311
Eskic, D. (2021). The Impact of High-Density Apartments on Surrounding Single-Family Home Values in Suburban Salt Lake County. Kem C. Gardner Policy Institute, University of Utah.
Pollakowski, H., Ritchay, D., & Weinrobe, Z. (2005). Effects of Mixed-Income, Multi-Family Rental Housing Developments on Single-Family Housing Values. MIT Center for Real Estate.
Obrinsky, M., & Stein, D. (2007). Overcoming Opposition to Multifamily Rental Housing. Joint Center for Housing Studies, Harvard University.
Nelson, A.C., & Moody, M. (2003). Price Effects of Apartments on Nearby Single-Family Detached Residential Homes. Virginia Tech University.
Haughey, R. (2005). Higher Density Development: Myth and Fact. Urban Land Institute.
U.S. Census Bureau. American Housing Survey. (Finding that working communities with multifamily dwellings have higher property values than those without.)
Maxfield Research Inc. (2000). A Study of the Relationship Between Affordable Family Rental Housing and Home Values in the Twin Cities. Family Housing Fund, Minneapolis.