More on housing

I meant to reprint some citations suggested on the pro-urb listserv:


1.  The Spring issue of Jacobin Magazine is about housing

From Laurence Aurbach:

2. Yesterday Richard Florida wrote about the responses to Storper and Rodríguez-Pose's article. In particular, he covered a rebuttal by Manville, Lens, and Monkkonen. Their critique is very good (if you like that type of writing), but I think their discussion of housing filtering is more valuable. First they explain how filtering works in the abstract:

Storper and Rodríguez-Pose . . . say that while upzoning could reduce prices, it would do so only for the most affluent housing consumers. . . . . This contention—that new housing won’t help lower-income people—is common, and on some levels understandable. New development tends to be expensive, and the idea that it can increase affordability is counterintuitive. But it’s important to remember that new development has always been relatively expensive. Most people in most places cannot afford a brand new housing unit. The hallmark of a housing crisis is not that new housing is expensive, but that older housing, which used to be cheap, rapidly increases in price. Los Angeles does not have a housing crisis because new apartments go for over $3,000 a month. It has a housing crisis because apartments built in the 1980s, which used to rent for $1,000, now rent for over $2,000."

"So while it is plainly true that a low-income person will not move into a new high-end apartment, it may be true that a rich person who moves into a new high-end apartment will not, as a consequence, bid up the price of an existing lower-rent apartment. The value of new housing is not that it houses the poor, but that it immediately relieves pressure on the older units where the poor tend to live, and then over time becomes old housing itself, and thus less expensive."

"The relevant question, then, is how new housing interacts with older housing: does it relieve pressure on the existing stock?"

Manville et al. cite several empirical studies that show that housing filtering is indeed real and widespread. Then they offer a thought experiment:

"Think about what it means to argue that housing markets are so segmented that the activity of affluent consumers has no impact on lower-income consumers. At its extreme, this contention implies that gentrification is all but impossible. Gentrification, after all, requires that new housing first becomes old enough that its price falls and lower-income people move into it, and then requires affluent people to return and bid its price back up. In both cases, the actions of the affluent are influencing the price for the non-affluent. Both of those conditions violate the assumption of high segmentation. Since gentrification does in fact exist, the housing market segments must be fairly permeable."

There is a political proposal motivating these dueling articles: SB50, the proposed upzoning of large parts of California's cities to allow more development. Storper used his article to oppose SB50, while the article by Manville et al. argues in favor of it.


3. The article that Richard Florida talks about is more like an editorial than actual research. It mainly criticizes existing research as lacking empirical evidence. It provides only a small amount of original analysis, which consist of a few simple correlations that don't demonstrate any causation.

The study that Peter Dreier linked to from the NYU Furman Center is quite good and cites a substantial amount of empirical evidence. It was also published in Housing Policy Debate. and is available with open access here, "Supply Skepticism: Housing Supply and Affordability."

Despite the headlines, both studies come to similar conclusions: Market-based supply is important but not sufficient by itself for affordability. Some places also need government support for lower-income housing.

The Furman Center study says cities need better advice about the range of affordability policies and how those policies can best be tailored to local contexts. One of the authors wrote this article ("What More Do We Need to Know About How to Prevent and Mitigate Displacement of Low- and Moderate-Income Households from Gentrifying Neighborhoods") that goes into detail about the gaps in knowledge and needs for research in this area. From the conclusion:

"The need for anti-displacement tools is acute and immediate, but policymakers considering potential remedies should be mindful of how little we know either about the problem those tools are being called upon to resolve or about how effective the potential remedies are. Without a better understanding of how gentrification affects existing residents of the gentrifying neighborhood, other neighborhoods, and other jurisdictions, our tools for fighting displacement are fairly blunt instruments, and may have many unintended consequences. That is not to say that jurisdictions should ignore the tools available; doing nothing is not necessarily better than trying tools that ultimately fail or turn out to have costs that outweigh benefits. Decision-makers often must act on incomplete information. Rather, the point is that researchers could provide significant value to policymakers by helping to fill some of the gaps this article has identified.".