The homevoter hypothesis is a theory proposed by land-use economist William A. Fischel in the 2005 The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies.
Book description from Harvard University Press: 
"Just as investors want the companies they hold equity in to do well, homeowners have a financial interest in the success of their communities. If neighborhood schools are good, if property taxes and crime rates are low, then the value of the homeowner’s principal asset—his home—will rise. Thus, as William Fischel shows, homeowners become watchful citizens of local government, not merely to improve their quality of life, but also to counteract the risk to their largest asset, a risk that cannot be diversified. Meanwhile, their vigilance promotes a municipal governance that provides services more efficiently than do the state or national government.
"Fischel has coined the portmanteau word “homevoter” to crystallize the connection between homeownership and political involvement. The link neatly explains several vexing puzzles, such as why displacement of local taxation by state funds reduces school quality and why local governments are more likely to be efficient providers of environmental amenities. The Homevoter Hypothesis thereby makes a strong case for decentralization of the fiscal and regulatory functions of government."
Amazon review from Michael Lewyn
(from Top Customer Reviews)
The “homevoter hypothesis” of this book is that local governments make land use decisions based on the views of the typical homeowner. Because a house is a large and illiquid investment, a “homevoter” (Fischel's word for a home-owning voter) often focuses not on maximizing property values, but on reducing the risk of a decline in property values. As a result, homevoter-dominated local governments shun new residential development (especially apartments or anything that might bring in poor people) or commercial development near housing, because even if those developments aren’t going to reduce property values, why take the chance? In addition, homevoters prefer small suburbs to consolidated regional governments, because larger governments might favor the broad public interest in new housing over homevoters’ neighborhood concerns.
Generally, Fischel seems to think that this is fine. For example, he thinks that homevoters are likely to maximize environmental protection, because pollution is bad for property values. Fischel rejects “environmental justice” claims based on the proximity of polluters to poor neighborhoods, reasoning that these neighborhoods benefit from cheaper housing, bigger commercial tax bases and closer proximity to jobs. Fischel also defends use of local property taxes to fund education, because good schools help property values, so homevoters will be willing to support high property taxes in order to improve schools.
Fischel thus attacks attempts to equalize school finances between property-rich and property-poor towns; as he points out, property-poor towns are not always full of poor people, since troubled urban areas often have fairly strong commercial tax bases. Although he admits that the data on this issue is ambiguous, he further claims that in pro-equalization states, many towns spend less on education and thus suffer from weaker schools. But if I understand Fischel correctly, he does not seem to think that increased state subsidies to poor cities did not improve education. But how can it be the case that more spending is good when tax money goes to rich suburban schools, yet not so good when it goes to poor schools? More broadly, Fischel doesn’t seem particularly interested in failed municipalities- poor cities that, despite having adopted zoning decades ago, don’t seem able to preserve property values or retain middle-class residents.
Fischel does admit in the last chapter or so that homevoters are likely to underprovide transit-accessible housing and housing for the poor. Given the popularity of homevoter-oriented zoning, he does not propose aggressive remedies for these problems, but instead endorses a variety of modest proposals that are more politically feasible but may be only slightly helpful. For example, he proposes improving education for the poor by creating “public-school supplements” for low-income families, payable directly to the public schools of their towns of residence. Ideally, suburbs will be willing to allow low-income housing in exchange for the extra money.