Department of Economics, Nelson Mandela Metropolitan University, PO Box 77000, Port Elizabeth, South Africa
Du Preez, M., Department of Economics, Nelson Mandela Metropolitan University, PO Box 77000, Port Elizabeth, South Africa; Sale, M., Department of Economics, Nelson Mandela Metropolitan University, PO Box 77000, Port Elizabeth, South Africa
Social housing projects often face substantial "Not-in-my- backyard" (NIMBY) sentiment and, as a result, are frequently plagued by local opposition from communities who argue that nearby property prices will be affected adversely by these developments. International hedonic pricing studies conducted have, however, produced mixed results with some concluding that social housing developments may in fact lead to an improvement in surrounding property values. There is, however, a paucity of South African evidence. This study considers the validity of the most pervasive NIMBY argument, the claim that social housing developments negatively affect nearby property values, by considering the property prices of 170 single-family homes in the Walmer neighbourhood, Nelson Mandela Bay, as a function of their proximity to an existing low-cost housing development. The results of this study indicate that in the case of one Nelson Mandela Bay low-cost housing development, a negative impact is exerted on the property values of nearby houses. © 2013 The Authors. South African Journal of Economics © 2013 Economic Society of South Africa.