In a groundbreaking study that challenges longstanding assumptions about the relationship between public safety funding and housing markets, University of Cincinnati economist David Brasington has unveiled complex, income-stratified effects of police spending on property values. His research upends conventional wisdom by demonstrating that the impact of increased police budgets on home prices varies dramatically depending on whether the community is low-income or high-income, revealing a nuanced narrative concealed in aggregated data.
Previous academic inquiries into the influence of law enforcement expenditures on real estate have largely yielded inconclusive or negligible correlations. Such studies often conclude that police funding has little to no effect on housing prices and transaction volumes. However, Brasington’s analytical approach diverges by disaggregating the data along socioeconomic lines, an oversight in prior research. This methodological pivot exposes significant and diametrically opposed movements in housing prices contingent on community income levels.
The core of Brasington’s analysis leverages an extensive dataset spanning over two decades—from 1995 to 2018—capturing voting records on police funding levies and corresponding residential real estate metrics across Ohio communities. By examining ballot measures dedicated to police budget increases, which averaged around 15%, and correlating these with subsequent home sale prices and volumes, the study unearths starkly contrasting trends. Specifically, the research published in the Journal of Real Estate Finance and Economics reveals that augmenting police funding correlates with a 13% increase in housing prices within low-income areas but simultaneously triggers a decrease of approximately 14% in high-income neighborhoods.
This bifurcation in effects suggests that the socioeconomic context critically modulates residents’ valuation of law enforcement services. In lower-income communities, increased police presence may mitigate crime and enhance perceptions of safety, thereby bolstering housing demand and elevating property values. Conversely, in affluent areas, the findings imply potential overprovision or inefficiency in police services. Residents might perceive additional funding as an unnecessary tax burden, diminishing their enthusiasm for homeownership or neighborhood desirability, which could depress housing prices.
Brasington articulates that when data from these diverging segments are combined without differentiation, their counterbalancing influences effectively erase each other, giving an illusion of a non-existent relationship between police spending and housing market dynamics. This concealed heterogeneity highlights the crucial importance of segmenting data by relevant demographic or economic characteristics to uncover latent market mechanisms.
The study also underscores that while police budget increases do not significantly affect the volume of houses sold—indicating that demand shifts do not translate into more transactions—the notable price fluctuations persist for at least five years post-levy introduction. This temporal persistence reinforces the substantive economic and social impact of policing policies on community housing markets.
From a theoretical perspective, Brasington situates his empirical findings within economic models of public goods and local service valuation, which suggest that public safety is a non-market good whose perceived utility is inherently subjective and context-dependent. The varying elasticity of demand for police services across income strata reflects diverse preferences and tolerances for risk and public expenditure.
The implication that police services may be overfunded in wealthier areas prompts a provocative reconsideration of resource allocation in public finance. If residents in affluent neighborhoods favor lower police taxes, this preference may result from either an actual lower crime rate or a different valuation of the trade-offs between security and taxation. Policymakers seeking to optimize the distribution of public funds must heed these divergent preferences to avoid inefficiencies and unintended consequences in housing markets.
Conversely, the positive correlation between increased police spending and home price appreciation in low-income communities suggests that investments in public safety can yield tangible economic benefits by fostering more stable and desirable living environments. Such findings advocate for targeted enhancements in crime prevention and law enforcement in economically disadvantaged neighborhoods as a catalyst for community revitalization.
Brasington’s research invites further exploration into the broader implications of fiscal policies on housing markets. Future studies may examine other forms of municipal levies—such as education, transportation, or health services—and their asymmetric effects across socioeconomic boundaries. Moreover, understanding how these dynamics influence the middle class could reveal crucial insights into housing affordability and social mobility.
The study’s novel approach and compelling conclusions punctuate a pressing narrative: the impact of public service funding on housing markets is not monolithic but deeply contingent on community characteristics. This nuanced understanding beckons a more sophisticated discourse among economists, urban planners, and policymakers concerning the intricate interplay between governance, public goods provision, and real estate economics.
David Brasington’s meticulous dissection of data establishes an enlightening precedent for empirical research—demonstrating how the aggregation of heterogeneous groups can obscure critical economic phenomena. As the conversation about policing, taxation, and community development intensifies nationwide, these insights provide a vital analytical lens through which to scrutinize public investment strategies and their societal reverberations.
This pioneering study encapsulates a salient message: the intersection of police funding and housing markets embodies a complex, multifaceted relationship that defies simplistic conclusions. Recognizing and embracing this complexity is indispensable for crafting informed, equitable policies that resonate with the diverse needs of urban and suburban communities alike.
Subject of Research: People
Article Title: The Effect of Increased Police Spending on House Prices and Sales Volume: A Tale of Two Types of Cities
News Publication Date: 16-Apr-2025
Web References: https://link.springer.com/article/10.1007/s11146-025-10012-z
Keywords: police spending, housing prices, real estate market, socioeconomic stratification, public safety funding, urban economics, community income, crime prevention, public finance, housing demand, tax levies, economic modeling
