Will A Group Home In Your Neighborhood Actually Lower Your Property Value?

A group home contains a group of people who are unrelated, but are receiving care for similar reasons. They may include those with physical or mental disabilities, children with no home stability, juvenile offenders, or those seeking rehabilitation for drug or alcohol abuse. The term can refer to a large, assisted-living facility, but many have received a zoning variance and are located in typical homes in normal neighborhoods, allowing the residents to feel properly settled and inconspicuous. These homes reduce the burden on family members or caregivers, provide jobs, and promote inclusivity, independence, or rehabilitation for occupants. They serve a necessary function in any community ... but if it's your neighborhood, you may worry that having a group home nearby could devalue your property. 

The concern is understandable. Some group homes house neighbors that aren't necessarily "ideal" in a safe neighborhood — such as troubled teens, the previously incarcerated, or those with drug problems. At the very least, they come with added traffic (from employees) and rotating residents, which is enough to give your HOA president some sleepless nights. 

Many studies have been conducted on this topic, and while most have found no link between group homes and an adverse effect on property values, these studies were conducted decades ago, so they may not fully reflect the current climate (which includes real-estate apps and an obsession with housing costs). However, while the type of group home and number of residents could arguably be a factor that affects home value, logic says that you probably shouldn't worry. Why? One key reason: Most of the time, other homes selling in the same neighborhood don't have to disclose any group home information to buyers, rendering it unimportant in regard to property value. 

In most areas, a group home with six or fewer residents can adhere to the same zoning and regulations as single-family dwellings, and aren't required to announce themselves to neighbors — meaning you don't have to disclose it to potential buyers. Under the Fair Housing Act, it's illegal to disclose a group home housing those with mental and physical disabilities. It is also unnecessary to disclose a nearby home for the elderly, although age is not specifically covered under the Fair Housing Act.  As a general rule, buyers are not allowed to ask about the kind of people who make up a neighborhood (although they can research a neighborhood before buying). 

What about "sober living houses," though? The Americans with Disabilities Act does recognize those in recovery from drug or alcohol abuse as having a disability. It's also important to understand that most are established as the final step in rehabilitation. The residents have already undergone initial treatment in a facility, and are taking the first step to re-enter society with round-the-clock supervision. So the same principles should apply here.  

If you're worried about the arrival of a group home in your neighborhood, there are a few things to consider. First, group homes come with staff who supervise residents. Next, group homes must adhere to state laws and maintain health and safety standards. Finally, there are rules in place that prohibit more than one group home within a certain perimeter, so allowing one group home in your neighborhood won't invite others. So there's no reason to fear a group home: It's performing an important role for individuals in need, and most likely won't impact you in any significant way.