Increase overall housing supply to match population growth at all income levels.
Tiny House pilot program at 38th and Walnut Sts., Denver (photo by authors)
Housing shortages at all income levels are a major contributor to gentrification’s inequitable outcomes. Urban areas across the United States fail to match growth in employment and population with adequate housing development. As more people move into a city, demand rises and prices increase, pushing lower-income renters into undesirable and remote neighborhoods, or out of the city entirely. In the Bay Area, a booming job market combined with a lack of housing construction has played a major role in the region's status as the most expensive housing market in the nation. This cuts off access to Bay Area jobs to those who can no longer afford to live there.
A city facing high housing demand, however, cannot simply build its way out of these direct and indirect displacement problems. If prices in a city have already increased, then rent inflation is baked into the market. If the high-income population continues to grow, most new units will be luxury-level, and prices will continue to as long as there is willingness to pay for such units in the market. A feverish pace of building would be necessary to reduce prices and cause units to filter down to lower-income residents. Seattle, for example, has built nearly enough units to match population growth, but the median price of rental units remains prohibitively high.
Urban areas must meet demand for housing at each income bracket. In other words, cities and regions must dramatically increase the number of affordable and subsidized units being built to meet demand in growing cities of low- and middle-income households. Greater availability of subsidized affordable housing will help lower-income renters stay in their communities even as market prices increase, and increase their chances of finding a decent home elsewhere in the city if they need to move.
To achieve this goal, we propose policies that incentivize private construction of affordable housing, make more funding available for subsidies, and increase regional cooperation to ensure that demand is met across an entire metropolitan area. Click below to learn about each policy.
Several of our case-study cities have already implemented policies that help build capacity for construction and increase funding for affordable housing. We believe that these policies serve as a baseline for what cities should be doing to combat inequitable development.
Since 1981, Seattle voters have approved a tax levy to provide dedicated funding for affordable housing. The 2016 levy costs just over $10 per month to the average homeowner, but to date, the levy has funded over 12,500 affordable homes. Seattle has also made it easier for developers to use city funding to build deeply affordable units by tying project-based vouchers to city-funded properties and ensuring that the requirements for city programs match the requirements for the federal Low Income Housing Tax Credit.
New York City has been using Transferable Development Rights for over 50 years. Transferable Development Rights, or TDR, increase density while giving communities some agency to preserve existing housing and local character. In New York, they are used primarily to preserve open space and historic landmarks, but professionals advocate for expanding the practice to all land uses. New York is also pioneering a practice where landowners in a particular area can purchase additional FAR, or buildable space on a lot, from the city, the proceeds of which can be used to fund public works. This could be an additional source of housing funding.
Seattle Housing Levy, 2014 Report of Accomplishments.
Designed for: Neighborhoods in Middle-Stage Gentrification
Neighborhood Hallmarks: growing rapidly, lots of new construction, increasing prices, many original residents remain, but many lost as well
There must be sufficient growth to generate demand for new construction, but enough residents must still be in the neighborhood to benefit from increased housing.
Designed for: Neighborhoods in Late-Stage Gentrification
Neighborhood Hallmarks: high prices, has lost many original residents, or is receiving displaced residents from a late-stage-gentrification neighborhood
If gentrifying neighborhoods have lost original residents, serving low-income households becomes even more important in the communities that receive them.