If you’ve ever supported a mixed-income or market-rate housing development, or policies that would make these developments easier to build, you’ve probably been asked some version of this question: “Why do you spend your time advocating for housing that most people can’t afford?” So many groups and individuals need more people fighting on their behalf: communities of color, unhoused residents, people with disabilities, extremely low-income households, single parents. Do people who can afford $3,000 per month in rent or an $800,000 condo really need another person working to make sure their needs are met?
I get it. There are only so many hours in the day, and high-income households really don’t need more people advocating on their behalf — they’re doing just fine, thank you. But there are many reasons to advocate for new housing, even when it’s quite expensive, that have nothing to do with helping rich people live better lives. I’ve put together a list of reasons below.
1. If new homes cost $800,000 today and we don’t build them at that price, they’ll cost $1 million tomorrow. They cost $600,000 at some time in the past, and $400,000 before that, and people were making similar arguments against the need for expensive new housing. If demand for housing continues to outstrip the supply, those new homes will cost $1 million, then $1.2 million, and upward from there. Given the choice between building $800,000 homes today or million-dollar homes tomorrow, we should choose the former.
2. Maintaining the barriers to market-rate housing development raises the price of housing for everyone, not just the buyers, renters, and builders of new units. New homes, even when they’re relatively expensive market-rate units, help keep prices in check across the board. And when people move into new homes, they leave vacancies in older, more affordable units. Los Angeles provides a depressing case study: Since 2016 we’ve increased spending on supportive housing and homeless services by billions of dollars, further supplemented by state funding, and we dramatically increased the number of individuals helped into shelter or housing each year. But because the broader housing market remains undersupplied, prices keep rising and the number of people becoming homeless is increasing at an even faster rate. (This is pre-COVID-19.) Despite spending much more, we’re actually falling further behind.
3. Choking off the supply of new market-rate homes doesn’t prevent rich people from living in the city, but it does force them to move into older, more affordable housing. They move here either way: their money gives them more choices than anyone. From 2010 to 2018, the number of households earning at least $100,000 in Los Angeles County increased by 364,000, but only a little over 100,000 homes were added to its housing stock; it’s a similar story in many high-demand U.S. cities. We’d have been much better off if someone had built those people homes, at no cost to the public, so they could stay out of the older units and the communities most at risk of gentrification.
4. When rents and land prices rise, the cost of rent vouchers, affordable housing development and acquisition, and other housing services all go up. So do the number of people who need housing assistance. It didn’t always cost $600,000 to build a unit of permanent supportive housing in Los Angeles; that happened because we built too few homes, causing land prices, then also labor, soft costs, and everything else to become more expensive.
5. We can’t afford to subsidize homes for everyone, so we should let the market provide housing to those who can afford it. It’s wrong to argue that the market can provide for everyone — it obviously cannot and has not. But just because the market can’t supply affordable homes for everyone doesn’t mean it shouldn’t provide homes for anyone. So long as market-rate (or mixed-income) homes are built in the right places and paired with strong across-the-board tenant protections (this is the subject of my book), they are a complement rather than competitor to non-market housing solutions. Even the international cities most celebrated for their social and public housing retain a significant role for market housing.
6. It doesn’t cost anything! Market-rate housing generally produces surplus public revenues while subsidized housing costs hundreds of thousands of dollars per unit. This isn’t an argument against subsidized housing, but it’s foolish to forego the benefits of private investment in housing when all we need to do is let it happen. And even in California, with its terrible property tax structure, at its current prices there’s strong evidence that market-rate housing is a net benefit to government coffers, not a drain.
7. Market-rate developments often produce income-restricted homes without public subsidy. Density bonus and inclusionary zoning programs across the country produce many thousands of homes reserved for low-income households each year, valued at billions of dollars. This is the most direct example of the complementarity between market-rate and income-restricted (affordable) housing.
8. The same policies that make it easier to build market-rate housing also make it easier to build subsidized housing. Let me say that again: The same policies that make it easier to build market-rate housing also make it easier to build subsidized housing, whether it’s public housing, social housing, LIHTC, shared-equity rental housing, or any other non-market housing type you prefer. Density restrictions, permitting delays and uncertainty, public engagement practices that privilege the opinions of wealthy homeowners, minimum lot sizes and parking requirements, excessive environmental reviews — all of these obstruct subsidized development as much as or more than market-rate development.
9. Displacement caused by the development of market-rate homes (or income-restricted homes) is not inevitable, it’s a choice. We can and should choose otherwise. Even in cities that are “built out,” we can choose to prioritize both market-rate and income-restricted housing development in places that require no involuntary residential displacement, like single-family owner-occupied homes and commercial corridors. To the extent that some displacement is necessary (even if it’s rarer than we usually acknowledge), we can — and again, should — enact policies like right-of-return and negotiated buyouts that protect tenants throughout the process. A major reason we fight about the impact of these protective policies is because we allow development on so few sites; if housing can be built in more places, and in higher-resource areas, and at greater densities, the cost of these protections becomes trivial. There’s also good evidence that new market-rate housing helps reduce displacement.
10. Housing policy is climate policy, and building dense market-rate housing near transit significantly reduces per-capita greenhouse gas emissions. On average, and all else equal, a rich household living in a downtown condo will have considerably lower emissions than the same household living in the suburbs. For driving in particular, the greatest reductions actually occur among high-income, rather than low- or middle-income, households. We need to make space in our cities for everyone who wants to live a low-carbon lifestyle.
Market-rate housing will sometimes conflict with other housing goals, including preventing displacement and building and preserving income-restricted housing. Policies to promote market-rate housing construction — and in many cities, 100% market-rate buildings are becoming a rarity, so we’re actually talking about mixed-income housing — must keep these other priorities in mind. Sometimes they’re in tension, which is a core theme of my book and something I’ve addressed on my blog on numerous occasions. At the same time, building too little market-rate housing is all but certain to make achieving these other goals more challenging, not less.
We’ve spent the past decade debating the role of market-rate housing, and new housing generally, and production remains at historic lows across the country. During that time prices have doubled in many places — not just for market-rate developments, but for 80-year-old homes, new income-restricted homes, rent assistance, homeless services, and all the rest. We should stop fighting over whether we need more market-rate housing — we clearly do — and instead focus on how to get the most out of it as we pursue non-market solutions on a parallel track.
Got more reasons? Send them my way and I may add them to the list.
Interested in learning more? I co-host the UCLA Housing Voice Podcast, where we talk with leading researchers about what works and what doesn’t — and why — in housing policy and urban planning. Topics range from the legacy of the Fair Housing Act, to value capture, to the impact of COVID-19 on renter households, and our conversations always lead back to the central question: How can we create more affordable and equitable communities? Two episodes with particular relevance to this post are our interview on the impacts of market-rate housing development on neighborhood rents with Evan Mast, and the impact of upzoning on single-family parcels with Daniel Kuhlmann. If you like what you hear, be sure to subscribe on your favorite podcast platform, and tell a friend!