It is a stark difference from what is most often believed, but drug consumption rooms actually lead to an increase in property prices in the area. Economists Hans Koster and Sofia Franco come to this surprising conclusion after extensive research. “The objective data all point in a positive direction.”

That drug consumption rooms have a positive influence on the well-being of drug users has been highlighted in numerous studies, but local residents often pose an obstacle to the establishment of such spaces. There is often a great fear that the neighborhood will decline: drug consumption rooms are thought to lead to increased crime, drug problems, and a drop in property prices. However, the opposite proves to be true.

Since there is a societal discussion in the United States about opening drug consumption rooms, Sofia Franco from the University of California reached out to Hans Koster from the Vrije Universiteit Amsterdam. In the Netherlands, drug consumption rooms have been around for a long time, and much data is available, while in the US there is an intense debate about the desirability of these spaces. Spuit 11 spoke with Hans Koster.

 What were the results of your research?
“We found that, first of all, the opening of a drug consumption rooms led to a 13 percentage point decrease in drug consumption, which is a significant effect. Secondly, we found a decrease in crime in the neighborhood, primarily drug-related. People no longer hang out on the street, and there is less dealing. This decrease was 24 percent, but overall crime also fell by about 8 percent. There was no so-called ‘waterbed effect’ where that crime would shift to other neighborhoods.”

You also looked at the effects on property prices.
“Yes, because that indicates the attractiveness of the neighborhood. If people are willing to pay more for homes, it suggests that the neighborhood has become more desirable to live in. When you look at the effects of opening a drug consumption room, there was an additional increase in property prices of about 2.5 percent. This increase was particularly evident in neighborhoods with low-income households. In high-income areas, property prices remained about the same.”

But they didn’t decline either?
“No. What you do see in high-income neighborhoods is that the number of reports regarding mentally unstable individuals increases after the opening of a drug consumption room. That’s not an increase in crime, but merely an increase in the number of reports. This may indicate that, after the opening of such a drug consumption room, residents in higher-income areas tend to call the police more often, even when little is happening. It often comes down to perception. The objective data all show positive developments.”

Rotterdam Law
Last year, Hans Koster also examined the effects of the so-called Rotterdam Law, which allows municipalities to refuse new residents in social housing in entire neighborhoods if they are unemployed. This was said to be good for the quality of the neighborhood. Koster discovered that the opposite was achieved here: property prices in these neighborhoods fell even faster because the designated areas were avoided by many people due to the stigma of the Rotterdam Law. Another study by Koster on the so-called Vogelaar neighborhoods showed that investments in such areas had positive effects.

By Dennis Lahey

Interview with Prof. Dr. Hans Koster