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An analysis of the neighborhood impacts of a mortgage assistance program: A spatial hedonic model
Author(s) -
Di Wenhua,
Ma Jielai,
Murdoch James C.
Publication year - 2010
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20530
Subject(s) - spillover effect , property value , closing (real estate) , payment , property (philosophy) , business , economics , econometrics , finance , real estate , microeconomics , philosophy , epistemology
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. © 2010 by the Association for Public Policy Analysis and Management.