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Do Housing Rehabs Pay Their Way? 4 3 7 The Goetz et al. (1997) report also looks at the effect that rehabilitated homes had on neighboring property values. The hedonic regression model constructed by Goetz and associates found a negative impact on neighboring property values of those homes that were demolished or reoccupied in the Houses to Homes program. However, these results were not statistically significant. Additionally, the results of the analysis may be the product of a weak spatial variable. The study used a city block as the proxy for a spatial relationship, which may not be a consistent or accurate measure of the spatial relationship. For instance, blocks vary in distance, and the location of each observed property is unpredictable in relation to the other homes on the block. The 1997 Goetz et al. report also covered research by others concerning the negative effect of abandoned houses on property values. For example, Emrath (1995:8) cited a one -city case study by the National Association of Home Builders, which found that the value of homes located within 30 feet of an abandoned building was reduced by 30%. Another work cited was Goetz et al. (1996:55). Using Minneapolis as a case study, they found that an abandoned housing building in a census tract reduced a property's value by $860. Finally, Moreno (1995:16), based on anecdotal statements from realtors, reported that an abandoned vacant property reduced the value of houses on the same block by $2,500. Moreover, the value of homes located next to, and across the street from, an abandoned vacant unit was reduced by $10,000. All three studies support the notion that thea presence of an akintloned vacant house in ai neighborhood is ai negative situation that shouki be addressed by rehabilitation activities because aillm ing it to fester would further discourage investment in the neighborhood. Using a combination of qualitative and quantitative data from a case study, Tuminaro and Solis (1997) investigated the effects of a highly concentrated neighborhood program in the City of Savannah, Georgia. To reverse the downward trend in property values and social problems within their service area, in 1994 Neighborhood Housing Services (NHS) of Savannah implemented a model -block program focusing on the rehabilitation and homeownership promotion of the most dilapidated block in the city. In 1996, the authors conducted site visits and extensive interviews with the neighborhood residents, first-time homebuyers, city and county officials, local bankers, real estate agents, insurance agents and CDC staff members. The authors documented the effects of NHS' model -block program in terms of increased real estate tax -base, neighborhood economic and business development, and the asset accumulation of the first-time homebuyers. One pertinent conclusion is that the investments made by the city, including Community Development Block Grants (CDBG) and HOME funds amounting to $128,110, (an average investment of $12,811 per rehabilitated housing unit), resulted in an annual increase of $96,960 in the real estate property tax base. No other reports or articles were found in the literature that deals specifically with the measure of indirect property value benefits of rehabilitated housing. However, J R E R I V o 1. 2 5 No. 4- 2 0 0 3 17