Here’s how much more it will cost you to buy a home in a ‘gayborhood’

The premium to buy a home in a “gayborhood” can be almost four times the typical home value for that metropolitan area, according to a new analysis from real-estate website Zillow ZG, +0.63% Across the country there are 10 major cities, including Philadelphia, Houston and Charlotte, where home values in gayborhoods are double the average for the city overall.

To produce its study, Zillow identified gayborhoods by looking at data from the American Community Survey to see what communities had the highest share of same-sex couple households.

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Nationally, San Diego’s North Banker’s Hill had the highest concentration of LGBT people, as 10.1% of the households are same-sex couples. The typical home value in that neighborhood was $792,400, or 25% more than the city’s average home value of $632,600.

‘While these neighborhoods still foster a sense of community and social acceptance, living within them often comes at premium many may not be able to afford.’

Gayborhoods didn’t drive higher home values everywhere, however. Homes located in LGBT neighborhoods in San Jose, Calif., San Antonio, Texas, and Kansas City, all had values that represented a discount relative to those cities’ typical home prices.

Historically, the presence of a gayborhood was a harbinger of gentrification. In many cities, tech hotspots have formed in areas that were home to large LGBT populations — in large part because these communities are known for valuing open-mindedness, urban theorist and author Richard Florida argued.

Home values are often higher in gayborhoods beyond, say, the fact that gay men tend to have fewer children than heterosexual couples and, therefore, more disposable income, Zillow researchers noted. In particular, many gayborhoods are located in close proximity to areas with amenities such as bars and restaurants and major employers.

As new businesses move into these neighborhoods — the renaissance or “tech takeover” of Chelsea in New York City, for example, with Google GOOG, -0.64%  buying up an entire city block there last year — lower income residents who have rented apartments in these areas often get priced out.

“While these neighborhoods still foster a sense of community and social acceptance, living within them often comes at premium many may not be able to afford,” Zillow director of economic research Skylar Olsen wrote in the report.

“This has a disproportionate effect on intersectional LGBTQ people — not just gay, but a person of color, transgender, a woman — those who are disadvantaged when it comes to earning potential.”

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