Study: The poor are better off when we build more housing for the rich

Study: The poor are better off when we build more housing for the rich

To low-income residents and the groups that fight for them in expensive cities, new market-rate housing often feels like part of the problem. If San Francisco and Washington are becoming rapidly unaffordable to the poor, why build more apartments for the rich?

New housing, these voices fear, will only turn affordable neighborhoods into unaffordable ones, attracting yet more wealth and accelerating the displacement of the poor. And so protestors rally against new market-rate apartments in Oakland. Politicians propose halting construction in San Francisco’s Mission District.

Economists typically counter with a lesson about supply and demand: Increase the sheer amount of housing, and competition for it will fall, bringing down rents along the way to the benefit of everyone.

It’s understandable that skeptics raise their eyebrows at this argument. It’s theoretical, based on math models and not peoples’ lives. It seems counterintuitive — that building for people who aren’t poor will help the poor. But the California Legislative Analyst’s Office just released some very good data backing up this point: Particularly in the Bay Area since 2000, the researchers found, low-income neighborhoods with a lot of new construction have witnessed about half the displacement of similar neighborhoods that haven’t added much new housing:

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