Neighbourhood renewal programs can produce significant and wide benefits to communities, according to new research which looked at communities with high culturally and linguistically diverse (CALD) populations.

The study, commissioned by the Australian Housing and Urban Research Institute, found that there was an average return over a ten-year period of $2.20 in non-housing benefits for every $1 spent on renewal.

The report said that a growing body of evidence pointed to the stigmatisation of housing in poorer neighbourhoods is associated with inferior access to health and education services, and relatively low levels of wellbeing.

In response, state housing authorities across the country are introducing renewal programs to improve public housing quality and strengthen service delivery in areas of concentrated social housing.

“These programs aimed to generate positive outcomes for individuals and households within the targeted communities. The aim was to reduce the socio-economic gap separating these areas from more advantaged communities,” the report said.

“Benefits varied by area and were influenced by the size and value of surrounding private housing stock and concentration of public housing. Benefits might also be boosted by emphasis on investment in community services,” researchers Professor Gavin Wood and Dr Melek Cigdem said.

The study analysed communities at Werribee, Doveton, Maidstone, Broadmeadows and Ashburton – all of which have large CALD or migrant populations.

“This study showed that higher house values occurred as a result of completing NR programs. The higher sale prices also generated additional stamp duty revenues for state governments which partly offset the cost of NR programs,” the report said.

“The research indicated that investment in NR programs can help to reverse negative perceptions of a neighbourhood and consequently raise property values and improve levels of wellbeing for residents in disadvantaged neighbourhoods,” it said.

The researchers said the findings were important because they suggest that NR programs can be justified on the grounds of economic efficiency – an argument not currently part of conversations on policy.

“The source of housing externality benefits could be lower levels of crime and vandalism, or higher income and employment as private investment in the area revives,” the report said.

“Further research is needed to unpack the benefits caused by increased house prices following NR. This is a new methodology in Australian urban and housing research that could be used as an evaluation tool in a range of areas relevant to urban and housing policy-makers,” it said.