If a same-sex couple moves in next door, your home value may well go up--but only if you and your neighbors favor gay rights.
Such was the finding of researchers David Christafore of Konkuk University in Seoul and Susane Leguizamon of Tulane University in New Orleans, in a new study of greater Columbus home values. They found that increasing the number of same-sex couples by one in 1,000 households correlated to a 1.1 percent increase in a value if voters strongly supported gay marriage. In neighborhoods that strongly opposed it, the presence of same-sex couples was associated with a 1 percent valuation drop.
The study, which will be published in the Journal of Urban Economics in early 2012, looked at the number of same-sex unmarried partner households in the 2000 U.S. Census and at more than 20,000 home sale prices that year, which predated the housing slump.
Why Columbus? It has a fairly typical gay population--slightly overrepresentative in the number of lesbian residents--and is in a swing state. Christafore and Leguizamon distinguished between gay-friendly and -unfriendly neighborhoods by how they voted on Ohio's 2004 Defense of Marriage Act, which defined marriage as being between a man and a woman.
"I was surprised that the results were so big, that increasing the number of gays and lesbians per 1,000 by just one would increase or decrease housing prices around 1 percent--so, several thousand dollars [of home value] is associated with the change in the number of gays and lesbians," says Leguizamon.
The results "confirm that individuals do respond to the sexual orientation of their neighbors. So there is some evidence to the complaint by gay and lesbian groups that they are targets of discrimination, and these preferences are strong enough to be picked up in the price you're willing to pay for your home," Leguizamon says.
She and Christafore are now researching how the presence of same-sex couples affects rental prices in liberal, moderate or conservative housing markets. Target cities include San Francisco, Seattle, New Orleans and the suburbs of New York City.
Reprinted from the January 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.