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OCT-09 -1996 15:20 BRIAN M OLSEN Policy Analysis Paper 111 July 1, 1982 Page 2 612 266 2174 P.06 has increased dramatically from the 100 residents who lived in five facili- ties in 1962. In July 1982, Minnesota had 298 group homes with a total licensed capacity of 4,781. At the same time. the number of state hospital residents diagnosed'as mentally retarded declined from 5,542 in 1962 to 2,395 in March, 1982. The latest declines can be attributed to a recent court consent decree (Welsch v. Moot, 1980) which mandated an 850- person reduction in state hospital MR population by 1987 and sharply curtailed future admissions to state hospitals. The Welsch v. Moot decree, combined with general growth in the system, will generate demand for hundreds of new community spaces by 1987. Minnesota has not been Immune to protracted opposition to group homes. Local ordinances, restrictive covenants, and narrow definition of "family" prevented the establishment of many group homes until a 1975 state law undercut local opposition (M.S. 462.357). The new legislation required that local governments treat group homes of six or less as single family residences. The lengthy protess of public hearings and zoning approval was thus eliminated. The same Iaw established group homes of 7 -16 residents as multi - family dwellings for the purposes of residential zoning. Though a decade of court challenges ensued2 the law has been upheld by the Minne- sota Supreme Court. II. LITERATURE REVIEW The extensive literature which examines the impact of group homes on pro- perty values is unanimous in its conclusion: group homes do not reduce sur- rounding property values. Studies conclude this regardless of the method used to measure property values_ Measuring impact of group homes is a complicated process, and researchers have employed several methods. Generally; studies choose a sample of city blocks or census tracts which contain a group home. These group home blocks are each compared with a similar "control "3 block. One of several measures of neighborhood impact might be used. Some studies look for increases in the number of sales in group home blocks as an indication that neighbors are trying to escape a nearby group home. Others try to determine if it takes longer to sell houses in group home blocks than in control blocks. But the central focus of most studies is change in property values. Several measures of change in property values have been used. Generally. researchers compare: (a) changes in assessed property value in group home neighborhoods to changes in control (non -group home) neighborhoods; (b) sale price as a percentage of list price in both group home and control neighbor- hoods; or (c) sale price of homes sold before the group home was established -ost recently, Costly v. Caromin Mouse, Inc. (313 N.W. 2d. 21 Minn. Supreme Court 1981). 3The control block is a residential block without a group home, but which is similar in all other respects to the group home block. By comparing group home blocks and,control blocks, the effects of a group home on property values can be distinguished from changes in housing values'generally. OCT- 07-1596 15 :43 6126256619 Page 11 941 P.06