How does the construction of a new building change who lives in the neighborhood?
That question is at the heart of urban politics in America today, where everyone knows we need to build more homes, but nobody wants them in their backyard. The opposition is motivated by many fears about change, but none is more vexing than the idea that new housing might actually be causing the very problems it’s supposed to solve: Making rents go up, and forcing people out of the neighborhood.
To some urbanites, this idea is intuitive: The new apartment building is the symbol of gentrification. It brings wealthy occupants who support new amenities, prompting a cycle of investment that ends in the forced departure of longtime residents and businesses. And while housing researchers agree that only new construction can bring down rents in expensive regions, the local effect of new supply is more contested. Some research shows new construction increases rents nearby; other research shows it decreases rents nearby.
That question is also at the heart of a gigantic study published this month by researchers with the Urban Displacement Project, which focuses on the Bay Area, where the addition of three new jobs for every one new house has, in recent years, given the region some of the highest home prices in the country. Comparing two decades of new apartments against the most detailed displacement data ever assembled, researchers led by Karen Chapple and Jackelyn Hwang conclude that new buildings are associated with more people moving in and out of neighborhoods.
That phenomenon, which housing researchers call “churn,” is a natural feature of urban life, and not necessarily a bad one. New parents may need a bigger place and empty nesters a smaller one; workers need to move closer to jobs and students to school; couples move in together, or move out. Most of the time, churn means people are making choices about how to better meet their own needs.
After neighborhoods experienced new construction, the study found, churn increased at almost all income levels, with more people moving in and out, except for the highest-income residents, who became less likely to leave. That’s not so surprising—most of the new buildings studied are targeted at higher-income residents, after all.
What’s surprising is that after new buildings were built, residents of lower income levels also continued to move into the neighborhood in great numbers. Even residents with very low or moderate incomes were more likely to move in than move out in the four years after a new building went up. While high-income residents fare the best, new construction appears to let more people into the neighborhood up and down the income spectrum.
Those trends flip only for “extremely low income” residents, who are slightly more likely to move out than in after new apartments get built. But even for them, in-migration increased slightly, and migration out rose by just 1 or 2 percentage points. If, in a normal year, 10 percent of low-income households move out, that number rose to 12 percent after new buildings showed up in the neighborhood. Displacement after new construction is real, researchers conclude, but it is very, very small.
The research reminds us of a few things about how cities work. First, even in the context of impossibly tight Bay Area housing markets, lots and lots of people move into and out of neighborhoods every year—even people who don’t make a lot of money. When we talk about gentrification or displacement, we are talking about movements that occur on the margin of all that churn that marks the baseline of city life.
Second, while this data will not convince anyone to say yes to more housing, it does offer some guidelines for how politicians can react. If all it takes to stem the tide of displacement in a growing neighborhood is helping a handful of families each year stay put, displacement is, in the authors words, “readily mitigable” through interventions like just-cause eviction laws, rent stabilization, or direct project-based subsidy. Those policies, the researchers found, help people stay put.
Building that new housing is important, even if it is aimed at high-income tenants. Not just because it keeps those wealthier urbanites out of the older buildings where they would displace existing residents, or because it seems to increase residential mobility across the board. If we build enough of it, and keep building it, those new buildings will go out of fashion, take on wear and tear around the edges, and become the affordable housing stock of tomorrow, without anyone lifting a finger.
