New IGS Research: Effect of Housing Production on Neighborhood Affordability

new homes under construction
June 2, 2016

The ongoing crisis of housing affordability in California has deepened the divide between those who believe it can be resolved by expanding the supply of market-rate housing and those who believe that market-rate construction on its own will not meet the needs of low-income households, for whom more subsidized housing needs to be built or stabilized. This debate continues to preoccupy policymakers, developers, and advocates. The new IGS Research Brief "Housing Production, Filtering and Displacement: Untangling the Relationships," by Miriam Zuk and IGS affiliated faculty member Karen Chapple provides a nuanced analysis of the relationship between housing production, affordability, and displacement in the San Francisco Bay Area.

The report finds that both market-rate and subsidized housing development can reduce displacement pressures, but subsidized housing is twice as effective as market-rate development at the regional level. The report also finds that at the local, block group level in San Francisco, neither market-rate nor subsidized housing production has the protective power they do at the regional scale, likely due to the extreme mismatch between demand and supply. It is thus unclear if subsidized housing production can have a protective effect on the neighborhood even for those not fortunate enough to live in the subsidized units themselves.

Although more detailed analysis is needed to clarify the complex relationship between development, affordability, and displacement at the local scale, this research implies the importance of not only increasing production of subsidized and market-rate housing in California’s coastal communities, but also investing in the preservation of housing affordability and stabilizing vulnerable communities.
Zuk and Chapple head The Urban Displacement Project, a community-engaged research project looking at gentrification and displacement in the Bay Area. Karen Chapple is a Professor of City and Regional Planning at the University of California, Berkeley. She specializes in housing, community and economic development, as well as regional planning. Chapple is a faculty affiliate of the Institute of Governmental Studies and the Institute for Research on Labor & Employment.