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The impact of social housing developments on nearby property prices: A Nelson Mandela Bay Case Study

25 September 2012
Publication Type: Working Paper
JEL Code: R00, R23

Social housing projects often face substantial “Not-in-my-backyard” (NIMBY) sentiment and as a result are frequently plagued by local opposition from communities who argue that nearby property prices will be affected adversely by these developments. International hedonic pricing studies conducted have, however, produced mixed results with some concluding that social housing developments may in fact lead to an improvement in surrounding property values. There is, however, a paucity of South African evidence. This study considers the validity of the most pervasive NIMBY argument, the claim that social housing developments negatively affect nearby property values, by considering the property prices of 170 single-family homes in the Walmer neighbourhood, Nelson Mandela Bay, as a function of their proximity to an existing low-cost housing development. The results of this study indicate that in the case of one Nelson Mandela Bay low-cost housing development, a negative impact is exerted on the property values of nearby houses.

Series title: Working Paper 241
1 September 2011
Journal: South African Journal of Economics
20 June 2013
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