Many multifamily developers are shifting from decades long focus on luxury or Class A property design and development to more affordable product, shifting because of the critical demand for more attainable housing. Yet, what if they don't need to? What if continuing to build luxury is able to cause a ripple effect of giving everyone the right home?
This CityLab article suggests just that.
There’s a fierce argument about housing affordability and supply that’s raging in the urbanist community. The big question: Does building “luxury” (or market rate) housing in wealthy neighborhoods free up more housing for everyone? Advocates in the “Yes In My Backyard” (YIMBY) movement say it does; others are more skeptical. The market-rate-skeptic’s view, as captured in Richard Florida’s write-up of a new paper by Andrés Rodríguez-Pose and Michael Storper, paints a picture like this: Allowing new market-rate housing citywide will only result in high-end units in already-expensive neighborhoods. At best, developers may win big as the wealthy enjoy new homes. At worst, it could exacerbate segregation in wealthy neighborhoods and displacement in low-income neighborhoods.
The pro-market-rate position, championed by YIMBYs, is more optimistic: This view would concede that, though it’s true that new market-rate units will be expensive given the current scarcity of housing, new units will ease up demand for existing housing. Through a process known as filtering, this older housing gradually becomes more affordable to middle- and low-income households. This will ultimately mitigate displacement risk in more vulnerable communities.
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