June 8, 2017

Home Prices in Gay Neighborhoods are Going thru the Roof










At the nadir of the housing market in 2012, homebuyers had to pay an average premium of almost 29%, or $209 per square foot, to live in communities with a higher share of gay, lesbian and bisexual residents. This year, homebuyers will need to pay a premium of nearly 37%, or $320 per square foot, to live in these same neighborhoods, according to a study released Wednesday by real-estate website Trulia and online dating site OKCupid IAC, -0.85% The conclusion? “Clearly, America’s gay neighborhoods have recovered at a faster rate than non-gay neighborhoods.”
Typically, researchers had to use U.S. Census data on same-sex couples in order to determine where gay populations concentrate. There is an obvious downside to that methodology, however. Not all LGBT people are in relationships and researchers may be inaccurately measuring where they live. To address this, Trulia and OKCupid developed the “Neighborhood Pride Score,” using OKCupid data on the location of gay singles combined with U.S. Census data on the location of gay couples. The researchers then cross-referenced this with house prices in those areas.
The highest premiums were in West Hollywood, the Castro District in San Francisco, Uptown in Dallas, Palm Springs, Hillcrest in San Diego and Edgewater in Chicago. The legalization of same-sex marriage in June 2015 may have led to more married couples buying homes together in those neighborhoods. That said, since gay individuals and couples tend to have fewer children and higher disposable incomes, they may seek to live in neighborhoods with more desirable amenities, or alternatively, they may simply attract such amenities after they move in.
Demand to live in communities were measured by “Neighborhood Pride” scores. To calculate the “Neighborhood Pride Score,” the researchers added the percentage of OKCupid users in each ZIP code to the percentage of households that are same-sex couples, based on the 2015 Census Bureau’s American Community Survey. So if 30% of OKCupid users in one ZIP code were looking for love, and 15% of those households were same-sex couples, they got a score of 0.45. These scores spiked in New York, New Orleans and Boston, and fell the most in Miami, Buffalo and San Francisco.  
Another theory: “If you are not raising children, you have two male incomes and have more money to devote to improve their home environment,” says Gary Gates, the recently retired distinguished scholar at the Williams Institute for Sexual Orientation Law and Public Policy at the University of California. There are possible limitations to house-price rises within a “gayborhood.” It may need to be “socially liberal” for an increase in same-sex households to increase house prices, a 2011 study by researchers at Konkuk University in Seoul and Tulane University in New Orleans found.
Diversity is good for the economic development and housing prices, Richard Florida, an urban theorist and author of “The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community, and Everyday Life,” concluded. Florida found that high-tech hot spots followed the gay neighborhoods. His own separate “Bohemian Index,” which measured the prevalence of artists, writers and performers, had similar results. “Artistic and gay populations,” he wrote, “cluster in communities that value open-mindedness and self-expression.”

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