The value of community: Evidence from the CARES program

Renters of multi-unit housing structures report weaker ties to their community than other renters and owner occupants. In response to the lack of a sense of community in multi-unit rental structures, owners and managers of these properties have implemented planned programs to establish stronger community ties for residents. We examine the effect of one such program, the CARES (Community Activities and REsident Services) program, on the rental price of apartments using both a standard hedonic approach as well as matching techniques designed to limit unobservable differences between treated and comparison units. Our results using propensity score matching to identify comparison units, suggest that monthly rents are between 5.7 and 9.3 percent higher for apartment units that offer the CARES program. We also find the effect of the CARES program to be stronger in larger apartment complexes, suggesting that renters are willing to pay a premium for a sense of community rather than just the increased services from the program.