Geography

The commodity effects of decommodification: community land trusts and neighborhood property values

Document Type

Article

Abstract

This article explores the impacts of community land trust (CLT) properties on the real estate prices of nearby homes through a case study of a relatively large CLT in Minneapolis, Minnesota. We use hedonic regression and a difference-in-difference estimation with spatial error correction to measure price effects. The number of developments citywide is insufficient to yield significant results. However, we find evidence that clustering CLTs stemmed the decline in sales prices during the foreclosure crisis. The introduction of the first nearby CLT had no measurable price impact, but each additional CLT was associated with a 5% higher sales price in North Minneapolis, and 3% higher in Central Minneapolis. In the postrecession period, we estimate that the introduction of CLTs in North Minneapolis was associated with a 10.9% increase in nearby sales prices. These results suggest that, contrary to common assumptions, price effects are strongest when affordable properties are spatially clustered.

Publication Title

Housing Policy Debate

Publication Date

2020

Volume

30

Issue

5

First Page

823

Last Page

842

ISSN

1051-1482

DOI

10.1080/10511482.2020.1768573

Keywords

community development and revitalization, community land trust (CLT), foreclosure, housing, neighborhoods

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