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News

ARTICLE

Date ArticleType
6/11/2019 Member News

White Paper of the Week: Market Rate Housing Leads to Housing Affordability


A new working paper by economist Evan Mast of the W.E. Upjohn Institute for Employment Research shows that even expensive new units in wealthy areas help relieve pressure on rents across the market, including in less-affluent neighborhoods. Importantly, that process doesn’t need to take years to unfold.

Mast looked at 802 new multifamily developments across 12 central cities. Using publically available data, he tracked the moving history of the residents of these new units. When a household moves into a new unit, they initiate a chain reaction by vacating their existing unit. A second household then moves into that unit, in turn vacating a third unit. For each new market-rate building, Mast followed this trail of movers back through six moves, tracking where residents moved from, a process he calls the migration chain. By the sixth link of this chain, approximately half of the families moved out of census tracts with below-median incomes and as many as 20 percent came from the poorest tracts in the city.

This work shows that housing markets are fluid and that home buyers regularly move between census tracts with varying income levels. Mast’s model suggests that for every 100 market-rate units built in wealthier neighborhoods, as many as 48 households in moderate-income neighborhoods are able to move into housing that better suits their needs, vacating existing units in the process. Additionally, somewhere between 10 and 20 of these households come from among the city’s lowest-income neighborhoods, vacating units and reducing demand where housing is most likely to be affordable for working families.

This report suggests that even expensive new units could free up existing housing and that for every 100 new market-rate units built, approximately 65 equivalent units are created by families vacating existing units. As such, this new supply, coupled with less demand, could play a major role in easing housing costs in the short run.

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  • Member Login
  • Join Now
  • Membership Rates
  • How your HBA membership saves you money
  • Good for your business
  • HBA's Brand Unveiling
  • Our Team
  • Our Board
  • Our History
  • Consumer Shows
  • Home Building Foundation
  • Oregon Home Builders Association
  • National Association of Home Builders
  • Contact Us
  • Member Benefits
  • Home Building Association of Greater Portland Receives Two National Association Excellence Awards
  • Home Performance Council
  • Portland Building and Urban Development Council
  • Remodeling & Custom Building Council
  • Professional Women in Building
  • Government Affairs Committee
  • Support our Political Engagement
  • HBA PAC House
  • Advocacy Resources
  • News
  • Building Science Program
  • Webinar Recordings
  • Construction Contractors Board (CCB)
  • Home Builders University
  • Lead Based Paint Classes
  • BuildRight Conference
  • Housing Forecast