Analysis Of Prop 312 Finds Unsheltered Homelessness and Property Crime Are Reducing Property Values

tucson homeless

An Arizona think tank, the Common Sense Institute Arizona, has analyzed the potential economic and fiscal impact of Proposition 312, which voters will decide on this November. Analysts found that there is a link between the increase in homelessness and declining property values.

Proposition 312 is aimed at tackling Arizona’s growing homelessness crisis, offering property owners the opportunity to receive tax relief for costs incurred due to unmitigated public nuisances, such as homelessness, vandalism, property crime, and drug use. This initiative asks voters to address the rising economic burden these issues place on Arizona’s property owners, in an attempt to spur enforcement of existing laws.

The Common Sense Institute Arizona (CSI), found that under the status quo, property owners in areas with unmitigated public nuisances are seeing their values decrease in real value. Meanwhile, homelessness is on the rise. Since 2017, the official count of people experiencing homelessness in Arizona has increased 60%, and in the greater Phoenix area the count has nearly doubled

“The rising rates of crime, homelessness, and drug activity in key areas of Phoenix appear to have taken a toll on property values and overall economic activity,” stated Glenn Farley, Director of Policy & Research for CSI. “In this kind of environment of declining relative property values and higher crime rates, there are ongoing problems requiring mitigation – like security and cleanup costs. In practice, though, the real impact is likely to be preventive: local governments may ultimately be more proactive about mitigating these nuisances if this proposal is enacted than they are today.”

Key Findings:

  • Problem increasing: Crime, drug overdoses, unsheltered homelessness, and other public nuisances have risen dramatically in Arizona and the greater Phoenix area since 2019. But the impacts are disproportionate: the problem has become more visible in certain parts of the city. This creates a negative economic impact for those parts of the city where local officials have failed to enforce existing laws
  • Property Value Loss: Commercial properties in Phoenix affected by unmitigated public nuisances have seen market rent appreciation fall to just 15.7% between 2019 and 2023, compared to the citywide rate of 30.2%. This represents up to $2.1 billion in lost property value due to slower appreciation in areas with high levels of homelessness, crime, and public nuisances.
  • Increased Crime: In areas with high public nuisance activity, the average crime rates for drug offenses, burglaries, robberies, and arson were between 3 to 5 times higher than the Phoenix average, driving up costs for property owners due to increased security measures and property damage.
  • Impact on Businesses: Businesses located in areas with elevated public nuisance levels experience significantly lower property appreciation and higher vacancy rates. The economic toll of unmitigated public nuisances has made it harder for businesses to thrive in these areas.
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2 Comments

  1. How much of the rise in homelessness is due to cities giving aid and services to the homeless? I tend to think that if cities stopped “helping” the homeless and simply enforced nuisance laws, the homeless problem would greatly diminish. Help for people on the street should be left to churches and non-profits, with no government money.

  2. “Analysts found that there is a link between the increase in homelessness and declining property values.”

    I want to get a $500,000 6 month grant to try and prove that the sun rises in the East and sets in the West.

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