Gay Neighbors Boost Property Values
Gentrification by gay people has previously been studied as a boon to property values. This study of home values in and around Columbus, Ohio concluded that an increase in the number of same-sex couples by one in 1,000 households is associated with a 1.1 percent price premium in enclaves that backed gay marriage. The same influx in areas that didn’t support same-sex marriage was linked to a 1 percent discount.
It compared average home prices in neighborhoods after controlling for a number factors, including distance to the central business district, income, graduate degrees, school quality, crime rate and house size.
Author Susane Leguizamon of Tulane University in New Orleans told Bloomberg:
“The perception that there is prejudice against gay and lesbians by conservative groups is strong enough to be picked up in market prices.”
How does this work? In a 2010 study by Richard Florida, director of the Martin Prosperity Institute at the University of Toronto, and Charlotta Mellander of Jonkoping International Business School in Jonkoping, Sweden found that it is an enhancement to cultural amenities and housing stock and an increase in the vibrancy of neighborhoods which an influx of gay couples brings — an ‘aesthetic amenity premium’ and a ‘tolerance or open culture premium,’ according to that study.
“This tolerance or open culture premium acts on the demand side by making local resources more productive and efficient operating through four key mechanisms. First, locations of bohemian and gay populations reflect low barriers to entry for human capital .. Second, larger bohemian and gay populations signal underlying mechanisms that increase the efficiency of knowledge spillovers and human capital externalities [a] primary engine of economic growth .. Third, artistic and gay populations reflect regional values that are open-minded, meritocratic, tolerant of risk, and oriented to self-expression.”
The 2010 census showed a 40% jump in the numbers of same-sex households, with significant increases in perhaps surprising places like Salt Lake City and St. Louis.
“Much of the increase is due to an increased willingness to report as opposed to Utah suddenly getting a surge of same-sex couples willing to move there, or that suddenly the [lesbian, gay and bisexual] population coupled at an increased rate,” Gary Gates, a demographer at the University of California-Los Angeles Williams Institute told the Salt Lake Tribune. Gates has noticed similar surges in other conservative states, including Arizona (70 percent), Montana (88 percent) and Oklahoma (70 percent).
The District of Columbia had the highest percentage of same-sex households according to the census, followed by Vermont, Maine, New Hampshire, Rhode Island, Massachusetts, New York, Connecticut, Maryland and California.
Picture by Ulises Jorge