Evaluating the effects of supervised consumption sites on housing prices in Montreal, Canada using controlled interrupted time series and hedonic price models

Abstract

AbstractBackgroundIn 2017, three brick and mortar supervised consumption sites (SCS) began operating in Montreal, Canada. Opponents argued the sites would attract people who use drugs to the respective neighbourhoods, contributing to reductions in residential real estate values.MethodsWe used controlled interrupted time series and hedonic price models to evaluate the effects of Montreal’s SCSs on residential real estate. We linked the Quebec Professional Association of Real Estate Brokers’ housing sales data provided by Centris Inc. with Statistics Canada’s census tract data, neighbourhood proximity measures, and Canadian Urban Environmental Health Research Consortium’s gentrification measures. We restricted analysis to sales between 1 January 2014 and 31 December 2021, and within 1,000m of a SCS (treated) or a men’s homeless shelter (control). We controlled for internal (e.g., number of bed/bathrooms, unit size) and external attributes (e.g., neighbourhood demographics; proximity to amenities), and included a spatio-temporal lag to account for correlation between sales.ResultsWhen controlling for census tract data and gentrification measures, the price of homes sold immediately after SCSs were implemented was 5.2% lower (95% CI: -1.4%, -8.8%) compared with control sales (level effect). However, the monthly value increased 0.6% faster (95% CI: 0.4%, 0.7%) in treated neighbourhoods (trend effect). Compared with the counterfactual (i.e., SCS never implemented), sales in treated neighbourhoods observed an absolute increase of $37,931.86 (95% CI: $12,223.35, $138,088.50) by December 2021. When we also controlled for proximity scores, the immediate level effect post-implementation disappeared (−3.3%, 95% CI: -0.7%, 1.1%), but monthly trend gains persisted (0.9%, 95% CI: 0.7%, 1.0%).ConclusionWe observed a modest negative effect on prices immediately following SCS implementation. However, controlling for proximity to neighbourhood amenities eliminated the level effect. Positive month-on-month price gains were consistently observed, suggesting community wide benefits of SCS implementation.