Affordable Housing Myths vs. Evidence

When a new affordable housing development is proposed, neighbors often raise the same worries: it will lower home values, bring crime, house people who do not work, and look cheap. Researchers have tested each of these claims, and the short answer is that the studies reviewed here do not support them as general rules. They find that new affordable housing has neutral or positive effects on nearby property values and crime in most settings, and that the lowest-income renters are mostly people who are in the labor force, are seniors, or have a disability.

The longer answer has real nuance. Effects vary with the neighborhood, the size of the development, and how well it is designed and managed. One major study did find a modest price decline in some higher-income areas. This guide walks through each common claim, names the specific research behind the answer, and notes where the evidence is limited.

Why These Claims Matter

Opposition from nearby residents, often called NIMBY (“not in my backyard”) opposition, can delay, shrink, or stop proposed developments at public hearings. Many of the arguments made at those hearings are testable predictions about what will happen after a building opens. That makes them a good fit for research: economists can compare neighborhoods that received new subsidized housing with similar neighborhoods that did not, before and after construction.

Most of the high-quality evidence below concerns developments financed by the Low-Income Housing Tax Credit (LIHTC), the largest federal source of new affordable rental housing, because it produces many comparable projects across the country.

Claims vs. Evidence at a Glance

Claim 1: “It Will Lower Our Property Values”

This is the most common objection, and the most studied.

What the evidence shows

A widely cited study is by economists Rebecca Diamond and Timothy McQuade, published in the Journal of Political Economy in 2019. They combined about 16 million home sales in 129 counties across 15 states with the locations and funding dates of about 7,100 LIHTC projects. They found that:

• In the lowest-income neighborhoods (the bottom quarter of the sites studied), new LIHTC developments raised home prices within about a tenth of a mile by roughly 6.5% over 10 years. The authors describe the effect as revitalizing those areas.
• In the highest-income neighborhoods (the top quarter of sites), prices within the same distance fell by about 2.5%, but only where fewer than half of residents were Black or Hispanic. “Highest-income” is relative here: tax-credit housing is mostly built in lower-income areas, and the income cutoff for the top quarter of sites was still below the average for the counties studied.

An earlier study of New York City by Ingrid Gould Ellen and colleagues, published in 2007, looked at a wide range of federally subsidized rental programs. It found that subsidized developments generally had not reduced nearby property values and had raised them in some cases. The authors also found that the effects were highly sensitive to the scale of the development.

The nuance

The evidence does not say affordable housing never affects prices. The Diamond and McQuade results suggest the effect depends on the neighborhood and who already lives there. In the lowest-income areas, a new development worked like an investment in the neighborhood: nearby crime fell and home buyers became more diverse in income and race. In higher-income areas where fewer than half of residents were Black or Hispanic, buyers paid somewhat less to live very close to a development. The authors note that they cannot fully separate buyers’ views about lower-income neighbors from their views about new construction or added density. Project size also matters, as the New York findings on scale suggest.

Claim 2: “It Will Bring Crime”

What the evidence shows

Economists Matthew Freedman and Emily Owens, writing in the Journal of Urban Economics in 2011, used a natural experiment built into the LIHTC program. Developments in a qualified census tract can receive larger tax credits, and changes in the federal rules for which tracts qualify shifted where projects were built. Using that variation, they found that low-income housing development in the poorest neighborhoods brought significant reductions in violent crime, measurable at the county level. They found no detectable effect on property crime.

Diamond and McQuade examined crime in Chicago, San Diego, and San Francisco, which publish detailed crime data, covering 127 LIHTC sites. They found that both violent and property crime declined near new developments in low-income areas. In higher-income areas, they saw no increase in crime. The authors note that some LIHTC properties have on-site security guards or a police outpost, which may help explain the declines.

The nuance

These studies measure average effects across many developments; they cannot promise how any single property will perform. The crime sample in the Diamond and McQuade study is limited to three large cities. Much of the evidence also concerns newer, privately owned and managed tax-credit housing, which differs from the large public housing projects that shaped many people’s impressions of “the projects.”

Claim 3: “The People Who Live There Don’t Work”

Who is eligible

Income-restricted housing is defined by income, not by whether someone has a job. A LIHTC property must meet one of several tests set out in Section 42 of the tax code, such as reserving at least 40% of its units for households at or below 60% of area median income (AMI). Under income averaging, individual units can serve households up to 80% of AMI as long as the average stays at or below 60%. In many places, full-time workers in jobs such as retail, child care, health care support, and food service have incomes within those bands. To see the limits for your area, use HUD’s income limits lookup on the HUD User website.

What the data show

Deeper subsidies, such as public housing and vouchers, focus on lower incomes. The National Low Income Housing Coalition (NLIHC), a research and advocacy organization, studied extremely low-income renters, those with incomes at or below the federal poverty guideline or 30% of AMI, whichever is higher, using the Census Bureau’s 2024 American Community Survey. In its March 2026 report, The Gap, it sorted those renter households into groups that do not overlap and found that:

• 33% were senior households (the householder or spouse was 62 or older)
• 18% were non-senior households in which the householder or spouse had a disability
• 34% were other households in the labor force
• At least 6% were students or single-adult caregivers of young children or of household members with a disability

Of those in the labor force, 41% usually worked at least 40 hours a week and another 33% worked 20 to 39 hours. In other words, the lowest-income renters are mostly people who are in the labor force, often at low wages, or who are older or have a disability.

The nuance

These figures describe extremely low-income renters as a group, not the residents of any particular building. Who lives in a specific property depends on its income targets, unit sizes, and whether it serves families, seniors, or people leaving homelessness.

Claim 4: “It Will Look Cheap and Become an Eyesore”

What the evidence shows

The best-known test of this concern comes from Mount Laurel, New Jersey, the town at the center of the landmark court cases behind the Mount Laurel doctrine, which held that New Jersey towns could not use exclusionary zoning to keep out lower-income housing. The Ethel Lawrence Homes, a 140-unit development of two-story townhouses affordable to households at roughly 10% to 80% of regional median income, opened in phases in 2000 and 2004.

Sociologists Len Albright, Elizabeth Derickson, and Douglas Massey studied the development in a 2013 paper in City & Community. They reported that its building materials were roughly similar to those of nearby suburban homes. When they surveyed 127 residents of adjacent neighborhoods, nearly a third did not know an affordable housing development was nearby, and only 13% reported any contact with its residents.

Cost data also cut against the idea that affordable housing is built cheaply. The Terner Center for Housing Innovation at UC Berkeley found that the inflation-adjusted cost of building a new 9% LIHTC unit in California rose from about $425,000 in 2016 to more than $480,000 in 2019. Federal law generally requires LIHTC owners to sign an agreement keeping units affordable for an extended use period of at least 30 years in total, which gives owners a reason to build for durability. The Terner study reports that developers of supportive housing said they design for extra wear and tear.

The nuance

Mount Laurel is a single case study, and appearance depends on choices made by each developer, funder, and local design review board. A high development cost does not by itself guarantee an attractive building. The high costs in California reflect that state’s land, labor, and regulatory conditions and are not typical of every market. The guide Why Housing Costs So Much to Build covers those cost drivers in more detail.

Claim 5: “It Will Raise Our Taxes”

Some opponents argue that new affordable housing will strain schools and services and push up property taxes. Albright, Derickson, and Massey tested this in Mount Laurel by comparing it with three similar nearby townships. They found that the opening of the Ethel Lawrence Homes was not associated with changes in trends in crime, property values, or taxes. After 2000, they report, Mount Laurel’s tax rate rose more slowly than in two of the three comparison townships. The authors credit careful tenant screening, an on-site management office, a resident community watch, design and landscaping that matched nearby subdivisions, and a site plan that kept shared spaces visible.

What Affordable Housing Means for Residents

The debate usually centers on neighbors, but research also asks what happens to the people who move in. The Moving to Opportunity experiment randomly offered some families in high-poverty public housing vouchers to move to lower-poverty neighborhoods. A 2016 study in the American Economic Review by Raj Chetty, Nathaniel Hendren, and Lawrence Katz found that children whose families used a voucher to move before the child turned 13 earned about 31% more in their mid-twenties than children in the control group, and were more likely to attend college. Children who were older than 13 when their families moved saw no gains and possibly some harm, which the authors suggest may reflect the disruption of moving.

That study concerns vouchers rather than new construction, but it helps explain why many researchers and policymakers pay close attention to where affordable housing is located, including in higher-opportunity areas and as part of mixed-income housing.

How to Read Housing Research

When you encounter a claim about affordable housing, a few questions help separate strong evidence from weak:

• Is there a comparison group? Good studies compare neighborhoods that got new housing with similar ones that did not, before and after construction.
• What kind of housing was studied? A small, well-managed tax-credit building is not the same as a large mid-century public housing project.
• Where? Effects in a low-income urban neighborhood can differ from those in an affluent suburb.
• How big was the project? Scale changed the results in the New York City study.
• Who funded or published it? Peer-reviewed journals and established research centers apply more scrutiny than advocacy materials on either side.

The Bottom Line

The fears most often raised about affordable housing (falling home values, rising crime, residents who do not work, and buildings that look cheap) are not supported as general rules by the research reviewed here. These studies tend to find neutral or positive effects on neighbors, especially in lower-income areas, and the lowest-income renters are largely people who are in the labor force, are seniors, or have a disability. The evidence is not uniform: one major study found modest price declines in some higher-income neighborhoods, and outcomes depend heavily on design, scale, and management. For more on how these developments are paid for, see How the Low-Income Housing Tax Credit Works.