Understanding The 606 s impact on the surrounding neighborhood s housing market

Transcription

1 PRESENTATION March 3, 2017 Understanding The 606 s impact on the surrounding neighborhood s housing market Presented by the Institute for Housing Studies at LISC Data Friday

2 Institute for Housing Studies IHS s mission is to provide reliable, impartial, and timely data and research to inform housing policy decisions and discussions in the Chicago region and nationally IHS accomplishes this through an applied research model Data collection and improvement Research Technical assistance 606 Analysis Understanding the role that public investment plays in driving neighborhood change has been a key recent question in urban policy Project looked at how the housing market responded to The 606 park system 2

3 The 606 linear park region has two different neighborhoods 606 West 606 East SOURCE: IHS DATA CLEARINGHOUSE 3

4 The 606 linear park region has two different neighborhoods Demographic characteristics of the eastern and western neighborhoods adjacent to The West 606 East Median Household Income, $ 49,701 $ 115,924 Poverty Rate, % 4.8% Renter Share, % 41.5% Latino Share, % 11.1% 4+ Person Household Share, % 9.4% SOURCE: IHS CALCULATONS OF AMERICAN COMMUNITIES SURVEY DATA - 5-YEAR,

5 The 606 linear park region has two different neighborhoods Housing market characteristics of the eastern and western neighborhoods adjacent to The West 606 East Share of Properties Impacted by Foreclosure, % 7.1% Median Single Family Sales Price, 2015 $ 450,000 $ 815,000 Investor Share, % 4.8% Share of Units in Two-to-Four Unit Buildings, % 29.2% SOURCE: IHS DATA CLEARINGHOUSE 5

6 How will this investment impact surrounding communities? The 606 West neighborhoods had characteristics indicating certain types of risk High concentration of populations vulnerable to displacement Renters Lower-Income Non-white Attractive investment potential Near strong market Relatively low values Substantial small rental housing stock Higher number of distressed properties 6

7 Applying the IHS Price Index to understand the 606 IHS used its Cook County House Price Index to understand the impact of The 606 on single family house prices Price index model controls for housing, location, and transaction characteristics to track changes in the sales price of a typical single family home House price changes are a good indicator of shifting demand and changing affordability Special cut of the index data and model was used to understand Price trends for a half mile buffer around The 606 How proximity to The 606 affected sales prices How trends and proximity varied for western and eastern sections 7

8 Price trends along The 606 Quarterly price trends for single family homes within ½ mile of The 606, 1997 to Q SOURCE: IHS COOK COUNTY HOUSE PRICE INDEX Q 8

9 Price trends along The 606 Quarterly price trends for single family homes within ½ mile of The 606, 1997 to Q SOURCE: IHS COOK COUNTY HOUSE PRICE INDEX Q 9

10 Is there a premium for being near The 606? Price premium for being located within 1/5 mile of The 606, pre-2012 and post % Pre Confirmed 22.3% 20.0% 15.0% 10.0% 5.0% 0.0% 0.0% -1.4% -5.0% Pre East, Post West, Post-2012 SOURCE: IHS CALCULATIONS OF DATA FROM IHS COOK COUNTY HOUSE PRICE INDEX Q 10

11 How does the distance premium change in 606 West? Change in price premium in 606 West by distance (miles) from The % 22.3% 20.0% 18.3% 15.0% 14.6% 10.0% 11.2% 7.9% 5.0% 4.9% 2.1% 0.0% Price Premium After 2012 in 606 West Price Premium after 2012 in 606 West SOURCE: IHS CALCULATIONS OF DATA FROM IHS COOK COUNTY HOUSE PRICE INDEX Q 11

12 How does the distance premium change in 606 West? Change in price premium in 606 West by distance (miles) from The 606 SOURCE: IHS CALCULATIONS OF DATA FROM IHS COOK COUNTY HOUSE PRICE INDEX Q 12

13 What does this mean in actual value? Distance premium for 1/5 mile applied to median single family home value in 2015 $900,000 $800,000 $815,000 $700,000 $600,000 $500,000 $400,000 $450,000 $100,350 $300,000 $200,000 $100,000 $0 606 East, West, 2015 Value without 606 Premium 606 Premium SOURCE: IHS CALCULATIONS OF DATA FROM IHS COOK COUNTY HOUSE PRICE INDEX Q 13

14 Overview of findings and implications As Chicago and other cities consider future projects like The 606, our findings can help inform more proactive, targeted and balanced policies to preserve neighborhood affordability. Neighborhood characteristics matter Policy incentives must be responsive to market changes The timing of interventions will be important to their success Proximity matters 14

15 Next steps How can these findings be broadened to answer questions about the risk of rising housing costs in other neighborhoods? What types of information gaps exist around this issue? What types of data resources would be most impactful to support proactive policy development and advocacy? How can this analysis approach be applied to answer other questions about the impact of place-based strategies? 15

16 March 3, 2017 Understanding The 606 s impact on the neighborhood housing market Contact: gsmith33@depaul.edu or sduda1@depaul.edu 2016 INSTITUTE OF HOUSING STUDIES AT DEPAUL UNIVERSITY