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Abstract
Senior group housing that offers services signals that its residents have physical and/or cognitive limitations, which may be viewed as a neighbourhood disamenity. Buyers may discount house values near group homes due to negative perception of the residents or the structure. Most senior group home residents come from the surrounding community; therefore, residents of neighbourhoods with a large proportion of older residents may perceive nearby senior housing as desirable. We employ a system of equations to examine the influence of assisted living and nursing homes on single-family house sales prices and time-on-the market. The results indicate that the presence of a senior group home, especially a nursing home, within one-half mile has a significant negative effect on single-family house prices. The effect is most evident in neighbourhoods with few elderly residents. A clustering effect is present in non-distressed sales. The scale of a nearby senior group home contributes to a longer marketing duration, especially for distressed sales.
Notes
Acknowledgement
An earlier version of this article received the American Real Estate Society 2018 award for the best article on seniors housing sponsored by the National Investment Center for Seniors Housing and Care (NIC).
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 A formal functional form test was not conducted, but the semi-log form utilized is commonly employed in this type of study (Deng, Citation2011; Galster et al., Citation2004; Koschinsky, Citation2009; Santiago et al., Citation2001; Schwartz et al., Citation2006; Song & Knaap, Citation2004: Zhang et al., Citation2016). A Breusch–Pagan test (χ2 (1) = 0.008, p = .930) indicates that heteroscedasticity is not present, and multi-collinearity does not appear to be a problem (VIF < 10) for all the variables except Age and AgeSq.
2 We tested the addition of a continuous distance measure, but it was insignificant in both the price and the selling time equations.
3 One assisted living facility received its initial license September 2010, another September 2011, and a third October 2014. These facilities are considered in calculating group home influences on prices within one-half mile from their date of licensure. Another assisted living facility opened in the area in September 2017, but no sales took place within one-half mile from October 2017 through the end of the study period. No nursing homes or assisted living facilities within the study area are known to have closed during the study period.
4 As the location of nursing homes is more restricted than for assisted living facilities, some of the negative influence on house prices may reflect other uses located near the nursing home in the same zoning district.
5 For example, there is no federal definition of an assisted living facility in the United States and state standards vary widely (Kling Citation2002). There is even less commonality of terms internationally (Howe et al., Citation2013).