- Blocking new housing construction worsens rent burdens for low-income families.
by Vanguard Staff
A new analysis from the Pew Charitable Trusts and California YIMBY shows that blocking new housing construction worsens rent burdens for low-income families, while expanding supply—even luxury apartments—slows rent growth the most in older, more affordable buildings.
Between 2017 and 2024, neighborhoods with median incomes under $43,300 faced rent increases 10 percent higher than those in wealthier areas. Researchers found that in cities where housing supply expanded by at least 10 percent, rent growth slowed dramatically, particularly in Class C apartments—older buildings with basic amenities that house low-income residents. In Austin, rents in these older buildings fell by 11 percent, while rents in new luxury buildings barely changed.
The researchers, Seva Rodnyansky, Dennis Su, and Alex Horowitz, examined Zillow rent data across 1,654 ZIP codes and matched it with Census income and housing construction statistics. They also studied more than 41,000 apartment buildings across the country. The findings highlight a consistent pattern: new housing, even at the high end of the market, eases pressure on older units where lower-income households live.
The study found that housing shortages hit poor neighborhoods hardest because residents have fewer alternatives when prices rise. When wealthier areas block construction, higher-income renters move into middle-income neighborhoods, pushing middle-income families into lower-income areas. With nowhere else to go, low-income residents face the steepest rent hikes and the highest risk of displacement.
The impact of new housing supply is strongest at the regional level. A 10 percent increase in housing across an entire metropolitan area reduces rent growth by about 5 percent, compared with a 10 percent increase in a single ZIP code, which only slows local rent growth by about 1.4 percent. This demonstrates that housing markets function broadly, and expanding supply throughout a region creates affordability benefits across neighborhoods.
The research also documented what economists call “moving chains.” When new luxury apartments are built, tenants who can afford them leave behind slightly older apartments, which are then filled by middle-income households. This chain continues downward, eventually opening units in lower-cost neighborhoods. According to economist Evan Mast, about 70 homes in below-average income communities become available for every 100 new market-rate homes built in wealthier neighborhoods.
Nationally, rents rose nearly 50 percent between 2017 and 2024, but the sharpest increases were concentrated in the lowest-income ZIP codes. More than a quarter of renters now spend over half of their income on housing, and nearly half of renters are considered cost-burdened by paying more than 30 percent of their income on rent.
Pew’s analysis found that cities which allowed significant housing growth fared much better than those that restricted development. Eleven large metropolitan areas added at least 10 percent more housing between 2017 and 2023, and they collectively saw rent declines in older apartments from 2023 to 2024. In Austin, Class C rents fell the most. In contrast, cities such as Los Angeles, New York, and Chicago, which limited housing production, experienced sharp rent increases and widespread displacement.
The findings reinforce arguments from housing advocates that restrictive zoning and opposition to new development worsen inequality. Expanding supply—even if it is not subsidized affordable housing—has measurable benefits for low-income renters, who bear the brunt of shortages.
According to Pew, every 10 percent increase in housing supply at the metro level correlates with an annual rent savings of about $470 for renters. At the neighborhood level, renters in high-supply areas saved about $120 per year compared to renters in low-supply areas. While these savings may seem modest, they reflect a crucial shift in affordability trends.
The evidence suggests that affordability requires building more homes—not fewer. Blocking construction, even of expensive towers, forces low-income families to absorb steeper rent hikes, while expanding housing supply keeps older, more affordable units within reach.
Cities such as Houston, Minneapolis, and New Rochelle have shown that zoning reforms and large-scale construction can slow rent growth and curb displacement. Advocates argue that these lessons should guide policymakers as housing shortages persist nationwide.
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Categories:
Breaking News Housing State of California
Tags:
California YIMBY Housing Advocates Housing Affordability Low-Income Families Low-Income Renters Pew Charitable Trusts Rent Growth zoning reform
