‘The effect is large’: Richmond safe injecting room’s $60k cost to devastated homeowners

Residents living near Richmond’s controversial safe injecting room are now financially worse-off due to the facility’s establishment, new research reveals.

Infuriated locals living next to North Richmond’s now permanent medically supervised injecting room (MSIR) have been dealt another bitter blow, following the release of a new study analysing the suburb’s housing market.

The Andrews government opened the controversial safe injecting room located on Lennox Street in July 2019 as part of a five-year trial that would provide a safe space for people to manage their drug dependency.

But the room, which neighbours Richmond West Primary School, has since divided the community, with many noting it has brought more crime and overdoses to a once cherished area.

A Facebook group created by locals has captured some of the confronting scenes families living in the area are exposed to daily.

Amid their pleas for help, several photos show drug-affected people lining the street, exposed needles on the ground and emergency service vehicles parked along the road.

The MSIR has resulted in more people ‘shooting up’ in the streets. Picture: Jason Edwards

Now, a new study by Deakin University and the University of Sydney has found such implications from the MSIR are not only impacting locals emotionally but also financially.

Research led by Jian Liang and Sergey Alexeev found the facility impacted the value of properties in the area in a similar way to the effects of increased crime or poor street appeal.

The study found homeowners living within an 800 metre radius of the facility had up to $60,000 shed from the value of their homes between 2016 and 2021.

The amount homeowners lost depended on how close they were to the injecting room, with those living within 400 metres of the facility seeing a higher percentage loss than those 800 metres out.

Meanwhile, there were no noticeable changes to the value of homes further than 800 metres and less than 2km away from the centre.

Additionally, the value of apartments remained unchanged.

The room is situated next to social housing units. Picture: Luis Enrique Ascui/NCA NewsWire

Houses located within an 800m vicinity of the safe injecting room have decreased in value. Picture: Google Maps

The results relate to similar research cited in the study which indicates “fear of drug use or its actual escalation, can adversely affect the local area”.

“From the dwellers‘ perspective, drug use may be perceived to lead to increased crime, nuisance behaviour, noise, traffic, and generally unpleasant activities in a neighbourhood,” the research paper read.

“This reduces the area‘s attractiveness and lowers property prices.”

Data was collected from 9352 houses and apartment sales situated within a 2km radius of Lennox Street, with parts of Abbotsford, Collingwood, Fitzroy and East Melbourne also included in the zone.

The same test was conducted on Melbourne’s CBD but no similar effects were noted.

“We clearly see the effect happens straight after (the establishment of the injecting room). The timing is perfect,” Dr Alexeev, a health economist at the University of Sydney, told The Age.

“The effect is large – and it does not go away.”

A bill was passed despite locals raising dozens of concerns about the matter. Picture: Andrew Henshaw/NCA NewsWire

The study, which was published in the Regional Science and Urban Economics journal in January, is the first of its kind to provide evidence of the impact the safe injecting room is having on property prices.

Previously, only suburb-wide data was available which didn’t take into account what specifically was impacting market trends.

In regards to the value of Richmond itself, data from realestate.com.au shows the suburb’s median price growth for houses has dipped by 5.4 per cent in the last 12 months.

This figure just about doubles for the median price of units and apartments with the cost of these properties decreasing by 10.9 per cent in the same period – but there is little evidence stating why this has occurred.

News of the study comes just hours after the Andrews government held talks regarding a Bill which would make the MSIR permanent.

The decision was made at about 10pm on Thursday night to pass the legislation – despite the facility being situated next to a school and locals protesting against it – and was backed by The Greens, Legalise Cannabis Party and Animal Justice Party.