Treatment Centers Can Impact Home Prices

Treatment Centers Can Impact Home Prices


Residential substance abuse treatment centers can impact the price of neighboring homes, according to a study that uses MLS data to show just how much it can potentially hamper nearby values.

Centers for treating substance abuse are increasingly being located within residential neighborhoods, and the number is expected to grow. Many property owners respond with a “not in my backyard” attitude when a center is proposed, with nearby residents arguing that recovering addicts could bring higher crime risk to their community.

Researchers Claire Reeves La Roche, Bennie D. Waller, and Scott A. Wentland at Longwood University in Farmville, Va., used MLS data from central Virginia to estimate the impact of substance abuse treatment centers on nearby home values. They also used the data to figure out whether homes near substance abuse treatment centers stayed on the market for a longer amount of time.

They found that home values within one-eighth mile of a residential treatment center is associated with an 8 percent reduction in home prices when measured against comparable homes that are farther away. The discount is magnified even more when the treatment centers are for those that specifically treat opiate addiction, which includes addictions to heroin or morphine. In those cases, home values are reduced by up to 17 percent, researchers found.

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