sardia wrote:https://www.washingtonpost.com/news/wonk/wp/2016/02/12/the-poor-are-better-off-when-we-build-more-housing-for-the-rich/New housing, these voices fear, will only turn affordable neighborhoods into unaffordable ones, attracting yet more wealth and accelerating the displacement of the poor. And so protestors rally against new market-rate apartments in Oakland. Politicians propose halting construction in San Francisco's Mission District.
Economists typically counter with a lesson about supply and demand: Increase the sheer amount of housing, and competition for it will fall, bringing down rents along the way to the benefit of everyone.
Key reasons is twofold.
First, supply and demand curves. More supply means that there are less rich people fighting middle class for houses. This results in less middle class people fighting poor people for housing.
Second, houses degrade in cost as time moves on. Yesterday's luxury housing is today's middle class housing, which will become tomorrow's poor housing.
I'm surprised that luxury>middle class>poor housing conversion happens. I just assumed that luxury houses stayed luxury or are torn down.
There is only "more supply" if more housing units are being constructed than demolished.
Let's say that 1000 low-income people are displaced in order to build housing for 1000 higher-income people. Note that there is no implication here that the total supply of housing is increasing. We do indeed need to increase the sheer amount of housing available, but demolishing one grade of housing and replacing it with another grade of housing contributes nothing towards that end unless more units are constructed overall than are demolished.