Housing Market Interventions and Residential Mobility in the San Francisco Bay Area
Abstract: The San Francisco Bay Area is an extreme case of a constrained housing market, with job growth outpacing new housing production and resulting in supply shortages and price spikes that date back at least 30 years. The Bay Area’s structural shortage of housing that is affordable at all income levels affects the regional economy by increasing commuting and housing costs, which creates barriers to full economic participation, especially for lower income workers. An array of solutions have been considered, including subsidized housing production, affordable housing preservation, and tenant protection programs. However, there is little evaluation research available to inform which housing solutions will be most effective in stabilizing communities so that those who wish to stay are able to, even in the midst of an influx of newcomers. This study seeks to fill this gap by examining the impacts of market-rate development, subsidized development, and tenant protections, including rent stabilization and just cause for evictions protections, on movers. Specifically, this study builds two unique and cross-validated datasets on mobility and links them to a bespoke block-level housing construction database. We use granular data on individual and household mobility to assess how specific housing interventions impact both direct and indirect displacement by looking at moves both out of and into neighborhoods with different characteristics in the nine-county San Francisco Bay Area. Our research reveals that new market-rate construction in a neighborhood results in a slight increase in people of all income levels moving in and moving out, i.e., churn. The increase in rates of displacement (involuntary moves) for very low- to moderate-socio-economic groups is not as high as commonly feared, at 0.5% to 2% above normal rates. However, the highest socio-economic group disproportionately benefits from new market-rate housing production—they are the least likely to move out and the most likely to move into neighborhoods with new construction. We also find that rent stabilization and just cause eviction protections help residents of the lowest socio-economic status remain in their neighborhoods. At the same time, these protections may have exclusionary impacts as we find that fewer low-income people move into neighborhoods with tenant protections. Together, these findings suggest that equitable solutions to the housing crisis will require more than just upzoning and tenant protections—these are complementary solutions, but not enough. Preserving unsubsidized affordable housing and substantially expanding social housing would help mitigate displacement and exclusion while addressing the housing affordability crisis through market rate housing production and tenant protections. Social housing is the provision of rental or homeownership units affordable at a moderate income or below, and is run by a public or nonprofit entity. To work, it would need to be widely implemented, requiring government investment at levels that match the urgency of the housing crisis.
File format is application/pdf
Description: Full text - article PDF
Provider: Federal Reserve Bank of San Francisco
Part of Series: Community Development Working Paper
Publication Date: 2022-03-02
Note: What follows is a short summary of the main findings of the study. Practitioner-oriented findings on the implications of new production, subsidized development, and tenant protections will be presented in a series of forthcoming policy briefs by the authors.