A Community Area Perspective of Real Estate and Crime in Chicago

Abstract

This paper examines the relationships between crime-types and property values in the community areas of Chicago. Using a variety of unconventional web-based data sources, the authors use correlations, mapping, and regression analyses to find that while crime generally associates negatively with property values, not all crime-types have similar effects. Lower incidence of violent crimes and sex offenders in neighborhoods can have pronounced positive impacts on property values whereas certain types of property crimes gravitate toward neighborhoods with expensive homes. Further, crime rates may be similar or even higher than those in cheaper/disadvantaged areas. These types of offenses do not necessarily follow the price-dropping effect like other crime-types do on housing values. However, property crimes such as thefts do not follow this trend. They, thus, recommend that property crime alone should not be a factor when making decisions concerning home buying and/or where to live.