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An analysis of the neighborhood impacts of a mortgage assistance program: A spatial hedonic model

Author

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  • Wenhua Di

    (A Senior Economist with the Federal Reserve Bank of Dallas)

  • Jielai Ma

    (A Research Associate at the Feinberg School of Medicine, Northwestern University, Chicago, IL)

  • James C. Murdoch

    (Professor of Economics and Public Policy at the University of Texas at Dallas)

Abstract

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.

Suggested Citation

  • Wenhua Di & Jielai Ma & James C. Murdoch, 2010. "An analysis of the neighborhood impacts of a mortgage assistance program: A spatial hedonic model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(4), pages 682-697.
    • Handle: RePEc:wly:jpamgt:v:29:y:2010:i:4:p:682-697
    DOI: 10.1002/pam.20530
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    References listed on IDEAS

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    Cited by:

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    4. Youngme Seo & Michael Craw, 2017. "Is something better than nothing? The impact of foreclosed and lease-purchase properties on residential property values," Urban Studies, Urban Studies Journal Limited, vol. 54(16), pages 3681-3699, December.
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    7. Jennifer Lewis Buell & Kimberly Burnett & Larry Buron & Alvaro Cortes & Michael DiDomenico & Anna Jefferson & Christian Redfearn & Jenny Schuetz & Jonathan Spader & Stephen Whitlow, 2015. "Which Way to Recovery? Housing Market Outcomes and the Neighborhood Stabilization Program," Finance and Economics Discussion Series 2015-4, Board of Governors of the Federal Reserve System (U.S.).

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