Policy Minute: Perspectives on Housing Supply and Affordability

NYU Furman Center Faculty Directors Vicki Been, Ingrid Gould Ellen, and Katherine O’Regan recently published Supply Skepticism: Housing Supply and Affordability, which examines questions that opponents of new development raise about whether increasing the supply of market-rate housing improves housing affordability. Read the Press Release.

The article summarizes prior empirical research about the effects supply constraints have on housing affordability and addresses several arguments made by supply skeptics. The research finds that increasing housing supply helps moderate price increases and makes housing more affordable to residents with low and moderate incomes. The authors caution, however, that cities must take a balanced approach in order to achieve economically diverse cities. While adding new market-rate supply is critical, so too is building and preserving subsidized affordable units. The authors also highlight the need for better data collection, in order to fill research gaps about the effects new construction has on its immediate neighbors.

As cities across the country work to address high housing costs, this Policy Minute highlights additional research and perspectives on housing supply and affordability.

NYU Furman Center Research and Resources

• City Nimbys explores opposition to development in cities, analyzing the reasons for this opposition and making recommendations for decision makers to consider when responding to development opposition. Read the article.
• 21st Century SROs: Can Small Housing Units Help Meet the Need for Affordable Housing in New York City? This policy brief discusses the economics of building and operating small units and models their financial feasibility. It analyzes the main barriers to the creation of small units in New York City and suggests potential reforms. The authors consider the possibility for smaller, less expensive units to help meet the city’s affordable housing needs. Read the policy brief.
• On the interactive website LocalHousingSolutions.org, NYU Furman Center and Abt Associates answer key questions about the creation of affordable housing and how the production of new housing affects housing affordability. Visit the website.
• In a CityLimits article, Furman Center Faculty Director Ingrid Gould Ellen and Senior Policy Fellow Mark Willis discuss the role that localities can play in addressing high housing costs and making it easier for supply to meet demand. Read the article.

Other Research and Reports

• In the article How Do Developers Respond to Land Use Regulations?, C.J. Gabbe analyzes how land use regulations affect housing production. The article recommends that cities take an evidence-based approach to reforming regulations and implementation processes. Read the article.
• The Economic Implications of Housing Supply by Ed Glaeser and Joe Gyourko reviews the state of affordability in U.S. housing markets and discusses the ways that supply can help determine affordability. Read the report.
• Housing Production, Filtering and Displacement: Untangling the Relationships, by Miriam Zuk and Karen Chapelle, discusses the importance of increasing production of market-rate and subsidized housing in order to alleviate the housing crisis. Read the research brief.
• Perspectives on Helping Low-Income Californians Afford Housing discusses the California affordable housing crisis and offers evidence that facilitating more market-rate development in the state’s coastal urban communities would help make housing more affordable for residents. Read the report.
• In a report about America’s Rental Housing researchers at the Joint Center for Housing Studies find that filtering – the process through which new units become gradually less expensive over time – has been the primary source of affordable units in recent decades. Read the report.

Additional Viewpoints

• A Shelterforce article expresses concerns that market-rate housing development takes decades to reduce rents and increase affordability for most renters. The article also summarizes additional concerns about the relationship between development and displacement. Read the article.
• This City Observatory commentary argues that, without increasing the housing supply, cities will intensify their housing shortages, rising rents, and displacement. Read the commentary.
• Open New York, part the nation-wide YIMBY movement, describes their support for development proposals in areas of high opportunity, but meets with skepticism from opponents of development. Read the article.

What can cities, towns, and counties do to make housing markets work again?
This LocalHousingSolutions.org video discusses how the production of new housing affects housing affordability, and reviews ways that streamlining the development approval process for new homes can contribute to increased affordability. Watch the video.