Gayborhood Home Premiums Top 200% in Some Markets

Gayborhoods - cultural enclaves that have long provided safety, community and belonging for LGBTQ+ people - are so in-demand that, in dozens of markets across the country, you'd pay a hefty premium to live there.

We're talking big money; in some cases, hundreds of thousands of dollars.

Take West Palm Springs, Calif., where more than 9% of all homes are headed by same-sex couples. A typical home there costs $1.2 million - $860,300 more than a typical home in the Riverside metro area, which costs $369,200.

That 233% premium for a typical home in West Palm Springs isn't even the largest. A Midwest gayborhood in Cleveland, also coincidentally named Riverside, carries a surcharge of nearly 294%, the largest premium among 36 metros included in Zillow's analysis.

There are, of course, a few gayborhoods where homes are cheaper than the areas where they are located. For instance, a typical home in downtown San Jose, Calif. (the closest that area has to a gayborhood - with 1.1% of households headed by a same-sex couple), costs $341,300 (38%) less than the $895,200 price tag on a typical home citywide.

But, overwhelmingly, homes in gayborhoods come at a premium.[1] Ironically, that surcharge puts the neighborhoods out of reach for many LGBTQ+ people, especially women and people who are transgender and gender nonconforming. Those groups, on average, have lower incomes than cisgender gay men.

The reasons for the surcharge are many, and stem largely from the role the LGBTQ+ community has played in the gentrification of urban centers, which also has had an impact on people who never left.

During much of the 1970s and 1980s, some people left cities for outlying suburbs, driving down property values in urban centers. Disadvantaged populations, including LGBTQ+ people, moved in for the cheaper rents and a sense of community, becoming what sociologist Sharon Zukin describes as gentrification's vanguard. They started new businesses and created tolerant neighborhoods that attracted more affluent LGBTQ+ people.

The amenities and jobs near and in those urban centers made gayborhoods especially attractive places to live,[1] beginning in the 1990s. "Home prices in historically gay neighborhoods have steadily outperformed average prices for the metros in which they're located" for several decades, according to the 2015 New York Times bestseller "Zillow Talk: The New Rules of Real Estate."

That cycle of gentrification is evident in what is now the San Francisco metro area's most expensive gayborhood, The Castro District, where more than 8% of households are headed by a same-sex couple.

In the '70s, The Castro was 8.1% less expensive than the city on average. By 2000, real estate prices in The Castro were nearly 40% above the average for the San Francisco metro.

Today, a typical home in the southwest corner of The Castro by Mount Olympus - where nearly 14% of households are same-sex couples, the highest among the analyzed U.S. metros - costs $1.8 million. That's more than 30% higher than the $1.35 million price tag on a typical home in San Francisco at large.

Zillow calculated the premiums associated with each major market's gayborhood by mapping same-sex couple households by census tract, matching those tracts to neighborhoods, and comparing typical home values between those neighborhoods and each city/metro as a whole.

Here's a snapshot of some of the premiums associated with some of the nation's most expensive gayborhoods:

Los Angeles

L.A. is a rare case, in that the city limits don't include nearby West Hollywood, which has the highest concentration of same-sex couple households in the metro area (4.75%). A typical home in West Hollywood is valued at $203,600 (33%) more than one in L.A. county.

The west side of the Norma Triangle neighborhood in West Hollywood, where 11.2% of households are same-sex couples, has a $468,000 (76%) premium compared to L.A. county.

Miami-Fort Lauderdale

Nearly 13% of households are same-sex couples in the western edge of Wilton Manors, a city north of Fort Lauderdale that boasts of being "The Second Gayest City in America."

A typical home in Wilton Manors will run you $89,300 (31%) more than if you'd bought one in the Miami-Fort Lauderdale metro area, where the typical home costs $284,900.

New York

Gayborhoods in New York are dotted throughout the city and metro area, but the highest concentrations of same-sex couple households are located throughout Midtown, the Garment District, and the West Side of Manhattan from West 74th Street to Christopher Street, including the Upper West Side, Chelsea, Hell's Kitchen and the West Village (outlined in red on the map below).

The typical home in this broad swath of Manhattan with higher concentrations of same-sex couple households is valued at $249,900 (20%) more than the typical Manhattan home, and $796,549 (117%) more than one in New York City as a whole.

Chicago

The higher concentrations of Chicago's same-sex couple households run along the northeastern side of the city in the communities of Edgewater, Uptown, Boystown and Lakeview (outlined in red below). The median home premium on this block of neighborhoods, compared to the city as a whole, is $69,106 (30%).

Seattle

Capitol Hill is Seattle's historic gayborhood, but the Central District, concentrated around Minor and Yesler, has a higher percentage of same-sex couple households. A Seattle Times analysis in 2014 found that while most other Seattle neighborhoods saw an increase in same-sex couple households between 2000 and 2012, Capitol Hill, which has a large number of LGBTQ+ establishments, saw a 23% drop.

The premium for a home in the Central District (outlined in red below) is only $3,411 (0.5%) compared to the city as a whole, likely in part because many same-sex couples relocated to the neighborhood and out of Capitol Hill as prices there, and in the city as a whole, skyrocketed in the past decade.

Washington, D.C.

While same-sex couple households are spread throughout the D.C. area, they are especially concentrated near Logan Circle. Segments of Dupont Circle, Shaw and Ledroit Park (outlined in red below) all have higher percentages of same-sex couple households than the District as a whole.

The typical premium on a home in those areas: $117,100, or 20%.

Atlanta

Midtown holds the title of Atlanta's gayborhood, and has a solid representation of gay bars. The typical home there costs $44,500 (17%) more than the typical Atlanta home.

Methodology

• To produce the table of gayborhoods, this research mapped concentrations of same-sex couple households and Zillow Home Value Index by census tract. The percentage of same-sex couples in each tract were gathered from the American Community Survey 2013-2017 dataset made accessible by IPUMS.org. Census tracts and groupings with the highest percentages of same-sex couple households were matched to the neighborhood that best contained them. Tracts with a very small number of households were not included in the analysis.

• The concentration of couples in more affordable neighborhoods with fewer gay bars and amenities illustrate a possible shortcoming of Census's same-sex couple data: It is likely to overrepresent older LGBTQ households who are more likely to be displaced to more affordable areas and out of amenity-rich spaces.[2]

• The lack of a question in the American Community Survey on sexual orientation and gender identity means that single LGBTQ people cannot be identified. As many of the above metros show, this can lead to gayborhoods that are likely to have high concentrations of LGBTQ singles being invisible on the map-often moving gayborhoods to more affordable and suburban parts of major metros.

[1] High percentages of same-sex couple households are unlikely to cause high home price premiums. Instead, because they are often located in or near urban cores, their proximity to work centers and amenities is likely to be more associated with the premiums.

[2] Using same-sex couple households, which is the measurement made available by the U.S. Census Bureau, is a workaround to the absense of a question about sexual orientation and gender identity. Same-sex couple households omit singles and generally skew towards older LGBTQ populations.

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