Loss of Age-Restricted Status and Property Values: Youngtown Arizona

Abstract

This study finds evidence of a large premium in house prices in Youngtown Arizona attributable to its age-restricted status. The persistence of a premium over long periods of time suggests that age restricted status can be a valuable component of the housing bundle, much like physical characteristics or location. It is likely that age-restricted status acts as a signal that the community provides facilities and services that meet the needs of the elderly and the assurance that those facilities and services will be available in the future. This assurance reduces uncertainty about the future and it is the reduced uncertainty that can be capitalized into house prices. The loss of age-restricted status in Youngtown, which increased uncertainty about the future, resulted in the elimination of the premium over approximately twelve to eighteen months even though essentially the same facilities and services continued to be available. The legal determination that Youngtown?s age restriction ordinance was invalid and could not be enforced had an immediate but temporary negative impact on house prices.