Baltimore’s residential real estate market is bearing the brunt of the economic consequences from the city’s continued struggle with violent crime.
Earlier this month Baltimore surpassed 300 homicides for 2019 marking the fifth consecutive year killings surpassed that milestone. While the violence creates a drag on various sectors of the regional economy, the city’s residential real estate market may be the sector most shaped by the killings.
Between 2014 and 2017 the Sandtown-Winchester, Coldstream, Broadway East, Bel Air Edison and the Central Park Heights neighborhoods suffered the highest number of homicides among Baltimore’s 250 neighborhoods, to Baltimore police data shows. Those neighborhoods, according to data from the Baltimore Neighborhood Indicators Alliance, also made up most or a significant portion of city communities with the lowest home prices.
During that three-year period Baltimore recorded 1,213 homicides that include 50 killings not listed in a specific neighborhood. Homicides tallied in those communities exclude incidents where a person was wounded in a prior year and later died from those injuries. Police count those deaths as homicides in the year the victims died.
Home data collected in the Baltimore Neighborhood Indicators Alliance’s Vital Signs reports calculates median home prices by community statistical areas that often include multiple neighborhoods.
The community with the lowest median home price between 2014 and 2017 was Clifton Berea area. That part of the city includes the Broadway East neighborhood, where 31 homicides took place during the same time frame.
The median price of $24,400 for a home in Sandtown-Winchester, which was second on the lowest price list, was tied atop the list of killings with 33 homicides.
The Coldstream Midway statistical area, which includes part of Coldstream, most of East Baltimore Midway, and part of Better Waverly, had the eighth-lowest median home price. The Coldstream neighborhood, according to police, was among the city’s deadliest neighborhoods with 33 homicides.
There were 28 homicides in the Belair-Edison neighborhood, which had a median home price of $45,500 between 2014 and 2017, which placed No. 12 on the lowest home price list.
Police recorded 28 homicides in the Central Park Heights neighborhood. That community is included with five other neighborhoods in the Southern Park Heights community statistical area, which had a median home price of $30,600 and placed No. 6 on the list of lowest home prices.
There was no data gauging the relationship between violent crime and Baltimore’s property taxes, which provides the city’s largest revenue source. In fiscal year 2020 the city’s budget department project property taxes to provide roughly 50% of Baltimore’s revenue.
Research conducted during the last several years in cities similar to Baltimore has detailed how violent crime, particularly homicides, hurt city coffers.
Philadelphia’s comptroller in October released a report, heavily indebted to research released by the Center for American Progress in 2012, measuring the impact of killings on that city’s economy. Philadelphia, like Baltimore, has experienced a surge in homicides. The number of murders in Philadelphia, according to the comptroller, spiked by 41% between 2013 and 2018.
The comptroller’s study concluded that a single killing reduced the sales price of home within ¾ of a mile by 2.3%. By reducing homicides by 10% for a single year its estimated Philadelphia’s property tax revenue would rise by $13 million.
If that reduction was sustained at 10% annually over five years it’s estimated the reduction would amount to $114 million in property tax revenue, including $43 million in the fifth year alone.
The study conducted by the Center for American Progress found a 10% decrease in homicides should result in a nearly 1% in boost in home values the next year. When killings drop 25%, according to the study, home prices the next year should increase in excess of 2%.
A 25% reduction in homicides, according to the study, would result in a in surge in housing values from $11 billion to $1.5 billion in cities such as Boston, Milwaukee and Jacksonville.