Could Market-Rate Housing Minimize Displacement?

It’s the trickiest issue for infill-boosters: how to make sure new development doesn’t displace existing residents, particularly low-income renters or owners?  Gentrification is the big concern.

But a new report from the Legislative Analyst’s Office (LAO) suggests that cities that build more market-rate housing in general may suffer less displacement:

Encouraging additional private housing construction can help the many low–income Californians who do not receive assistance. Considerable evidence suggests that construction of market–rate housing reduces housing costs for low–income households and, consequently, helps to mitigate displacement in many cases. Bringing about more private home building, however, would be no easy task, requiring state and local policy makers to confront very challenging issues and taking many years to come to fruition. Despite these difficulties, these efforts could provide significant widespread benefits: lower housing costs for millions of Californians.

This trend holds true even without inclusionary housing policies that require new developments to subsidize affordable housing:

6518The bottom line seems to be that the more market-rate housing, the more overall prices stabilize, which in turn allows existing residents to be able to continue to afford to stay in their homes.  It also provides new housing opportunities for middle- and high-income residents, so they don’t gentrify and push out lower-income neighbors.

The report authors provide a helpful video to summarize the findings:


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