An analysis of the neighborhood impacts of a mortgage assistance program: A spatial hedonic model

Down payment or closing cost assistance is an effective program in addressing the wealth constraints of low- and moderate-income homebuyers. However, the spillover effect of such programs on the neighborhood is unknown. This paper estimates the impact of the City of Dallas Mortgage Assistance Progra...

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Bibliographic Details
Published in:Journal of policy analysis and management 2010-09, Vol.29 (4), p.682-697
Main Authors: Di, Wenhua, Ma, Jielai, Murdoch, James C.
Format: Article
Language:English
Subjects:
Down payments
Economic Impact
Economic policy
Estimation
Financial Support
Home ownership
Homes
Housing
Housing prices
Impact analysis
Mortgage loans
Mortgages
Municipalities
Neighborhoods
Neighbourhoods
Ownership
Policy analysis
Program Effectiveness
Property values
Public policy
Real Estate
Real estate market
Real estate sales
Spatial models
Studies
Texas
U.S.A
Valuation
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Summary:Down payment or closing cost assistance is an effective program in addressing the wealth constraints of low- and moderate-income homebuyers. However, the spillover effect of such programs on the neighborhood is unknown. This paper estimates the impact of the City of Dallas Mortgage Assistance Program (MAP) on nearby home values using a hedonic model of home sales from 1990 to 2006. We define neighborhoods of 1,000 feet around each sale and estimate the average differences in sales prices between neighborhoods with various numbers of MAP properties before and after their appearance. We find that MAP properties tend to locate in neighborhoods with lower property values; however, unless a concentration of MAP properties forms, the infusion of MAP properties has little detrimental impact on neighboring property values. Moreover, low concentration of MAP properties has a modest positive impact on surrounding property values.
ISSN:0276-8739
1520-6688
DOI:10.1002/pam.20530