In the past few years, a growing number of residential neighborhoods have faced the establishment of homeless encampments in their environs. Because this is something of a newer phenomenon, there is little definitive research on the precise impact homeless encampments have on property values in residential neighborhoods in which these camps exist.

Historically, homeless encampments tended to rise in city centers, including in commercial and industrial zones. In this day and age, in many metropolitan areas, homeless encampments can fairly be said to be cropping up everywhere.

Understanding the dearth in more definitive data specifically directed at the impact of homeless encampments on residential property values, we present a fair, reasonable extrapolation of data on matters impacting residential valuations that have a real, affirmative connection to the impact of homeless encampments.

Comparative Drag on Property Values: Cross Referencing Property Value Decrease From a Homeless Shelter

The National Association of Realtors has done extensive research on the impact the establishment of different types of businesses in or near a primarily residential neighborhood has on property values. One type of entity that the National Association of Realtors has examined is a homeless shelter. Through its research and analysis, the National Association of Realtors has concluded that a homeless shelter in a residential neighborhood has the potential for lowering property values by 12.7 percent.

As of this moment in time, the National Association of Realtors has not undertaken a comprehensive study on the impact homeless encampments have on property values in a residential neighborhood. With that noted, a fair extrapolation can statistically and realistic be made when using a homeless shelter in a residential neighborhood as a starting point for calculating the impact of a homeless encampment.

A basic fact is that a homeless encampment brings all of the same negative considerations to a residential enclave that are found with the presence of a homeless shelter – and then some. The negative elements homeless encampments share with homeless shelters include:

  • Higher crime rates
  • Increased police calls into the neighborhood
  • Damage to residential property by homeless shelter residents
  • Significantly increased drug use in the neighborhood
  • Increased public intoxication or inebriation
  • Increased assaults on and threats to property owners or renters in the neighborhood

In addition to these factors homeless encampments share with homeless shelters, camps have other negative features that outpace those associated with shelters:

  • Raw human waste in the neighborhood
  • Other dangers biohazards (including used hypodermic needles used for drug injection)
  • Unsightly encampments themselves
  • Inability to access sidewalks
  • Inability to access parks
  • Lasting damage to public spaces
  • Even higher crime rates than associated with shelters
  • Even more frequent police calls into the neighborhood than associated with shelters
  • Persistent odors emitting from an encampment

Anecdotally and statistically, it is correct to conclude that the presence of a more harmful entity in a residential neighborhood in the form of a homeless encampment will cause an even greater drag on residential property values.

Curb Appeal Extends Beyond Immediate Residence To Entire Block and Beyond

A great deal of attention is paid to curb appeal when it comes to the marketability of a residence. Million Acres, a service of Motley Fool, defines curb appear as:

At its core, the term “curb appeal” refers to the way your home looks when it’s viewed from the street. It’s a combination of all the eye-catching design elements that are used to make your home’s exterior look its best. Homeowners often do their best to add curb appeal because they want their home to be aesthetically pleasing when they pull into their driveway at the end of a long day. However, it becomes even more important when thinking of putting the property on the market.

Spectrum, a support organization for homeowners’ associations across the United States, emphasizes that curb appeal is not limited to the state of an individual residential property. The concept of curb appeal extends to a block or neighborhood in its entirety. Spectrum asserts:

Neighborhoods with plenty of curb appeal tend to maintain property values better. Surprised? No, we didn’t think you would be. While it is obvious that well-kept homes, yards, and common areas help neighborhoods stay desirable, it’s hard work keeping neighborhoods in like-new condition!

While not trying to sound overly superficial, the stark reality is that any type of eyesore on a block or in a neighborhood impacts the curb appear of those individual residences in the area. The word eyesore has become something of a technical term when it comes to the impact of something unsightly and its impact on surrounding property, including homes. A common place definition of eyesore is something that is largely “considered unpleasant or ugly.” From a technical standpoint, the usage of eyesore is considered as “an alternative perspective” to a landmark.

Common examples of eyesores impacting the curb appear and associated property values of homes include:

  • Litter
  • Graffiti
  • Dilapidated structures
  • Polluted areas
  • Excessive signage
  • Transmission towers
  • Weeds
  • Mud
  • Feces

A number of these common examples of eyesores are generally connected to homeless encampments, including litter, dilapidated structures, polluted areas, mud, and feces. Added to the list usually is used hypodermic needles used from illicit drug consumption.

Residential Property Unsellable in Neighborhood With Homeless Encampment

If a neighborhood is the site of a homeless encampment, a real issue arises as to whether a home can be placed on the market effectively for sale. This becomes even a more significant issue if a homeless encampment is on the block where a particular residence is located.

We’ve already discussed the impact a homeless encampment can have on residential property values. The market value of a residence can experience a significant drag if a homeless encampment is in the neighborhood. That alone may be a reason to hold off putting a home on the market, if at all possible.

On a related note, if a homeless encampment is in a neighborhood in which a house is on the market, odds are strong that attracting prospective buyers to even take a look at the property will be next to impossible. Not only will the value of a residence drop significantly while a homeless encampment exists on the block or in the neighborhood, a homeless encampment in and of itself very well may have the same impact on prospective buyers as a crucifix has on a motion picture vampire.

Property Values After a Homeless Encampment Is Eliminated in a Neighborhood

Depending on ordinances and related factors in a particular community, a homeless encampment may prove relative transient. With that said, even in a county or municipality that has more aggressive regulation of homeless encampments, such camps may remain in place for a matter of months, not days or weeks.

On a closing note, issues regarding property values and homeless encampments, homeless encampments can persist even after camps are removed or otherwise eliminated. First of all, a comprehensive cleanup and sanitization process needs to occur to attempt to restore the property to a sanitary and safe condition.

Secondly, even after comprehensive cleaning and sanitization has occurred, the fact that a homeless encampment existed in a neighborhood may hang like something of a fog over the residences in the area. This can continue to impact property values into the future for what also can be a matter of a number of months. 

In closing, the reality is that homeless encampments can and do have what oftentimes prove to be significant impacts on property values in residential neighborhoods. The residential property value drag is even likely to persist for some period of time once a homeless encampment in a neighborhood has been removed.