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Keep in mind that New York already has more public housing — over 177,000 units — than any other American city. The Big Apple also has nearly 300,000 housing voucher-supported units, and 960,000 rent-regulated apartments. That’s more than a million subsidized or rent-controlled units. If subsidized and regulated housing were the secret to affordability, New York would be leading the way. Instead, it faces low vacancy rates and a perennial housing crisis. - Howard Husock
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AN ALPHA IN AFFORDABLE HOUSING?
Recap
On Monday, we took a “scatter”-shot approach to housing development touching on how buildings get valued, what changes under a higher interest rate environment, the noticeable decline in housing construction productivity and the possible role of GSE’s to provide construction level loans. The motivation here was to help generate possible ideas for your first writing assignment.
Today, we turn our attention to the idea of Filtering.
Luxury Apartments Are Bringing Rent Down in Austin, Denver
Opinion | There’s a practical way to lower housing prices. Democrats should seize it.
Introduction
As Mast lays out in the introduction of the paper, there are roughly three approaches to building affordable housing.
One could directly encourage the production of affordable housing by (A) having the government develop/own affordable housing units (Public Housing), (B) providing tax incentives for the development of affordable housing → Low Income Housing Tax Credits, or (C) requiring banks to lend at below market interest rates to developers for Affordable Housing. The key in all three is that affordible housing units get built.
A second approach which is at times difficult to distinguish with those methods above is to incentivize the production of both affordable and market rate housing. For example, inclusionary zoning policies relax zoning conditions (density restrictions for example), if some of the new developments are kept affordable.
A third approach is to simply just build market rate housing in the hope that similar to musical chairs, newer housing will entice everyone to move up a level of quality. Mast’s paper is an interesting read because it gives us some sense empirically of the extent to which this works.