We are often asked if building more homes will really bring down prices across the board, but good news: the evidence shows it does. Here are five key studies that show how more housing means less expensive housing for all.

  1. https://escholarship.org/uc/item/5d00z61m
    1. A meta analysis – “study of studies” – from UCLA
    2. Taking advantage of improved data sources and methods, researchers have released six working papers in the past two years on the impact of new market-rate development on neighborhood rents.
    3. Five find that market-rate housing makes nearby housing more affordable across the income distribution of rental units, and one finds mixed results.
    4. “To be clear, this debate is not about whether new housing can reduce housing prices overall. At this point, that idea isn’t really in doubt. There’s good reason to believe that in regions with high housing demand, building more housing can help keep the prices of existing housing down.” 
  1. https://www.upjohn.org/research-highlights/new-apartment-buildings-low-income-areas-decrease-nearby-rents
    1. Study from the Federal Reserve Bank of Philadelphia
    2. “New market-rate buildings lower nearby rents 5 to 7 percent and cause more people from lower-income neighborhoods to move in.”
  1. https://www.sciencedirect.com/science/article/abs/pii/S0094119021000656
    1. Study from the Upjohn Institute for Employment Research
    2. “Constructing a new market-rate building that houses 100 people ultimately leads 45 to 70 people to move out of below-median income neighborhoods, with most of the effect occurring within three years. These results suggest that the migration ripple effects of new housing will affect a wide spectrum of neighborhoods and loosen the low-income housing market.”
  1. https://ideas.repec.org/p/fer/wpaper/146.html
    1. Study from the Finnish government’s economic research agency 
    2. “Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. Market-rate supply is likely to improve affordability outside the sub-markets where new construction occurs and to benefit low-income people.”
  1. https://www.dropbox.com/s/oplls6utgf7z6ih/Pennington_JMP.pdf?dl=0
    1. Study from UC Berkeley 
    2. “Rents and displacement fall near new market rate projects”