A study recently published in the Journal of the American Planning Association, “Can New Housing Supply Mitigate Displacement and Exclusion?,” examines the impact of new market rate and subsidized rental housing construction on the mobility of low-income renters in California. The study finds that, overall, the new construction of market rate rental units within a neighborhood generally increases the probability of low-income renters moving into the neighborhood within one year of construction but reduces the probability that low-income renters move out of the neighborhood in some weaker housing markets. In contrast, the study finds that the new construction of subsidized rental housing generally increases move-ins while decreasing move-outs and thus more successfully avoids the displacement and exclusion of low-income renters.
The researchers compared the impacts of new rental housing construction on low-income renter mobility outcomes in various market and neighborhood contexts in Los Angeles and San Francisco, California, from 2010 to 2019. They created a dataset on the number of market rate and subsidized units built during this time period and combined this dataset with household-level housing income and mobility data from Data Axle’s Consumer Reference Dataset (CRD) as well as census tract-level 5-year estimates of household demographic and neighborhood characteristic data from the 2017 American Community Survey. The analysis was limited to low-income renter households – those with incomes below 80% of the city-level area median income for each year per the CRD. The researchers used binomial logistic regression models to measure the aggregate impact of three years’ worth of new construction on both short-term (1 year) and long-term (5 years) trends in movement into and out of a neighborhood. Because the CRD does not provide data on whether moves were voluntary or not, the researchers defined neighborhood displacement as the increased probability of low-income renters moving out of a neighborhood and neighborhood exclusion as the decreased probability of low-income renters moving into a neighborhood.
The researchers found that in both Los Angeles and San Francisco, new market rate construction generally increased the probability of low-income renters moving into neighborhoods, with little variation across neighborhood types. For every 100 new market rate units constructed, the probability of a low-income renter moving into the neighborhood within one year of construction increased by 10% in Los Angeles and 15% in San Francisco, relative to neighborhoods where there was no new construction. Building market rate units in high appreciation markets slightly increased the probability of short-term move-ins (within one year) relative to areas with no new construction but decreased the probability of long-term move-ins (by year 5). The construction of new market rate units was found to decrease neighborhood displacement in Los Angeles, reducing the probability of a low-income renter moving out of these neighborhoods by 2% for every 100 new units constructed. In contrast, neighborhood displacement increased by 14% in San Francisco for every 100 new market rate units constructed.
The researchers also found that the construction of new subsidized housing units generally increased move-ins while reducing neighborhood displacement for low-income renters over the short-term in both cities. In Los Angeles, the probability of displacement within one year was reduced by 5% for every 100 new subsidized units constructed, while the probability of a low-income renter moving in within one year increased by 23%. In San Francisco, the probability of displacement within one year decreased by 16% for every 100 new subsidized units constructed and the probability of move-ins within one year increased by 12%. The researchers found that newly constructed subsidized units resulted in higher neighborhood move-in rates than move-out rates in Los Angeles when at least one new subsidized rental unit was built in the neighborhood, and in San Francisco when more than 20 units were built.
The researchers conclude that these findings show new market rate construction may help to alleviate the exclusion and displacement of low-income renters, but only in certain markets, and only with the creation of 100 or more units. In comparison, the construction of new subsidized rental units helped to alleviate exclusion and displacement in most markets. However, the researchers emphasize that displacement and exclusion are primarily due to underlying socioeconomic conditions that construction alone cannot solve and call for construction to be paired with interventions that target race, gender, and income inequities.
Read the article at: https://bit.ly/3vBomZS