Supply Skepticism Revisited

66 Pages Posted: 13 Nov 2023

See all articles by Vicki Been

Vicki Been

New York University School of Law

Ingrid Gould Ellen

New York University (NYU) - Robert F. Wagner Graduate School of Public Service

Katherine M. O'Regan

New York University (NYU) - Robert F. Wagner Graduate School of Public Service

Date Written: November 10, 2023

Abstract

Although “supply skeptics” claim that new housing supply does not slow growth in rents, we show that rigorous recent studies demonstrate that: 1) Increases in housing supply slow the growth in rents in the region; 2) In some circumstances, new construction also reduces rents or rent growth in the surrounding area; 3) The chains of moves sparked by new construction free up apartments that are then rented (or retained) by households across the income spectrum; 4) While new supply is associated with gentrification, it has not been shown to cause significant displacement of lower income households; and 5) Easing land use restrictions, at least on a broad scale and in ways that change binding constraints on development, generally leads to more new housing over time, but only a fraction of the new capacity created because many other factors constrain the pace of new development.

Keywords: land use/zoning, affordability, gentrification, rental housing, multifamily, construction/building

Suggested Citation

Been, Vicki and Ellen, Ingrid Gould and O'Regan, Katherine M., Supply Skepticism Revisited (November 10, 2023). NYU Law and Economics Research Paper No. 24-12, Available at SSRN: https://ssrn.com/abstract=4629628 or http://dx.doi.org/10.2139/ssrn.4629628

Vicki Been (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6223 (Phone)
212-995-4341 (Fax)

Ingrid Gould Ellen

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

Katherine M. O'Regan

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States
212-998-7498 (Phone)
212-995-3890 (Fax)

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