Exactly how gay populations affect the urban housing market is something of an open question. On one hand, surveys have found that gays and lesbians believe they've been targets of housing discrimination at times [PDF]. If a neighborhood doesn't want gay people to live there, one might expect its average home values to drop. On the other hand, research from 331 metro areas by our own Richard Florida has found that artist and gay populations increase housing prices in urban neighborhoods [PDF], because these groups produce amenities that are at a premium and reflect a tolerance that facilitates the exchange of knowledge and ideas.
New research, scheduled for publication in the March 2012 issue of the Journal of Urban Economics [pre-press PDF], tries to settle these conflicting findings by focusing on a single city: Columbus, Ohio. The leaders of the study, economists David Christafore of Konkuk University in Korea and Susane Leguizamon of Tulane University, wanted to see if home values in various neighborhoods of Columbus responded differently to the presence of gay populations. They wanted to discover whether any real estate fluctuations might turn on a single key factor: the neighborhood's sociopolitical slant.
Christafore and Leguizamon used data from the 2000 Census to determine same-sex households in the Columbus metro area. They then gauged the political leanings of various neighborhoods of the city based on voting records from the "Defense of Marriage Act" in Ohio. In 2004, Ohio became the 38th state to approve the act, which defines marriage as between a man and woman and refuses to recognize same-sex marriages from other jurisdictions. Christafore and Leguizamon presumed that areas where more people voted for the act were likely conservative, and those that voted against it were more liberal. Last, they evaluated more than 20,000 real estate transactions that occurred in the Columbus area in 2000.
Their results suggest a strong link between a neighborhood's social ideology and its response to gay populations, as measured in housing prices. In areas where 59 percent or more voted against the marriage act — in other words, more liberal areas — the number of same-sex households was associated with a rise in home values. In areas that voted more vehemently for the marriage act — considered more conservative neighborhoods — housing prices dropped when same-sex households increased. (The mean vote for Columbus was 56 percent approval.)
The extreme ends of the spectrum offered additional support for their argument. In the most liberal part of the city, where approval of the marriage act reached just 31 percent, an increase in just a single same-sex household in a thousand was connected with a full 1 percent rise in home price. In the most conservative neighborhood, where approval of the act reached 84 percent, adding one gay household in a thousand was linked with a full 1 percent decline. A closer look at the data revealed that gay males drove the shift in value; the presence of lesbians didn't seem to influence prices as strongly.
Overall, the authors conclude, the results suggest "that prejudice against same-sex coupled households does exist in areas that are socially conservative."
Photo credit: Reuters/Javier Diaz