WXXI AM News

Connections: The impact of new luxury housing on the supply of affordable housing

Jun 7, 2019

Can building new, high-end housing units help increase the supply of affordable housing? A new working paper says it can. Economist Evan Mast of the W.E. Upjohn Institute for Employment Research studied the effect that luxury housing construction had on relieving pressure on rents across the housing market. His research shows that when a household moves into a new, more expensive unit, it creates a so-called musical chair effect, vacating an existing unit at a lower price point. The chain-like effect continues down the line until it reaches a city’s lowest-income neighborhoods. Mast says this increases the supply of affordable housing. Critics of the research say building more high-end housing in already wealthy neighborhoods increases segregation in cities.

So what could happen in Rochester? The question comes as local developers build new high-end apartments across the city. This hour, our panel discusses the research and the possible impact of luxury housing on the local community. Our guests: