Do Housing Rehabs Pay Their Way? A National Case Study

By Simons, Robert A.; Magner, A. J. et al. | The Journal of Real Estate Research, October-December 2003 | Go to article overview

Do Housing Rehabs Pay Their Way? A National Case Study


Simons, Robert A., Magner, A. J., Baku, Esmail, The Journal of Real Estate Research


Abstract This research focuses on if housing rehabilitation by community development corporations pays its own way. The recent experience of ten local housing organizations in the Neighborhood Reinvestment Corporation network is examined. These organizations assist homeowners in rehabbing existing units and acquire, rehab and transfer units to new occupants. The findings indicate that rehabbed housing units provide substantial benefits to the local economy. The rehabbed units return $0.55, on average, for every local government dollar invested. In addition, economic benefits such as increased property values and tax base, and construction jobs and permanent jobs were created and sustained.

Introduction

Many private sector market participants and not-for-profit groups participate in the rehabilitation of housing. In some inner-city markets, these groups are the only developers active in producing housing. Community Development Corporations (CDCs) have become one of the main producers of affordable housing and community development. Recycling housing through rehabilitation (rehab) is important for many reasons. In addition to providing safe, decent and affordable housing to persons of modest means, rehabs allow many first-time homebuyers the opportunity to get on the equity ladder of homeownership. Homeownership is in turn related to higher levels of personal, residential and life satisfaction, improved self-esteem, and psychological and physical health. Other desirable outcomes benefiting society are greater neighborhood stability attributable to longer tenure in the house; more social involvement such as voting participation; higher levels of house maintenance activities; and other socially desirable behaviors (Rohe, McCarthy and Van Zandt, 2000). The benefits of homeownership from housing rehabs may also lead to greater utilization of city infrastructure and retail services. Newly revitalized housing makes a much higher financial contribution in the form of taxes than a dilapidated or boarded up unit, which may instead be a burden on the local economy and property markets by contributing to blight and lower property values.

The role of CDCs in revitalizing urban areas is considerable. According to the Fourth National Community Development Census, conducted by the Urban Institute in 1998, there were 3,600 CDCs nationwide involved in affordable housing and/or community economic and commercial development. During the last four years, CDCs produced 245,000 affordable housing units. By the end of 1997, they had cumulatively developed 71 million feet of commercial and industrial space, and their total outstanding business loans amounted to $1.9 billion involving 59,000 businesses (Urban Institute, 1999:5-7).

CDCs' affordable housing programs include a broad spectrum of activities that include one or a combination of the following services: housing finance, rehabilitation, new construction, purchase-rehabilitation-sale, emergency home repair, acquisition, homeownership promotion, development of rental units and management. Sixty-nine percent of CDCs are involved in housing rehabilitation. In addition to their affordable housing and community economic development programs, most CDCs are involved in providing a selected number of community services such as youth programs, community organizing, community safety, job training, child care and emergency food assistance. The main sources of support for CDCs' operating expenses and programmatic investment include federal, state and local governments, national intermediaries, foundations, private lending institutions, corporations and religious institutions (Urban Institute, 1999:15).

Despite their significant and increasing role in providing affordable housing and community revitalization services, very few published studies quantify the impact of CDCs in the local arena. One important question is to what extent the positive effects of housing on the local economy offset any subsidy costs, in other words, does rehab housing pay its own way? …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Do Housing Rehabs Pay Their Way? A National Case Study
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.