Housing Market Interventions and Residential Mobility in the San Francisco Bay Area
March 2022
Report Authors: Karen Chapple, Jackelyn Hwang, Jae Sik Jeon, Iris Zhang, Julia Greenberg, and Bina P. Shrimali
Research Brief Authors: Karen Chapple, Jackelyn Hwang, Jae Sik Jeon, Iris Zhang, Julia Greenberg, and Vasudha Kumar
Researchers from the Changing Cities Research Lab at Stanford University, the Urban Displacement Project at the University of California, Berkeley, and the Federal Reserve Bank of San Francisco released a new study pinpointing the impact of new housing production, subsidized development, rent stabilization, and just-cause eviction policies on displacement. The study focused on the nine-county Bay Area.
California has a housing affordability crisis and a shortfall in housing production that will reach 1.5 million units by 2025. Lawmakers need to target spending to the most effective programs, but it’s hard to know what’s effective without robust, current data. Until now, researchers have struggled to pinpoint the impacts of solutions like new housing production and tenant protections on residents, due to the lack of fine-grained data. Our study overcomes previous data challenges for the first time by building unique and cross-validated datasets on mobility and linking them to a bespoke block-level housing construction database. It is the most granular data on displacement in the Bay Area ever produced.
Our core findings from the study include:
More market-rate housing construction primarily serves the most affluent—they are the least likely to move out and the most likely to move into neighborhoods with new construction.
Contrary to common belief, when new market-rate housing is built in a neighborhood, there is only a slight increase in people of all income levels both moving in and moving out—churn. The increase in rates of displacement for very low- to moderate-socio-economic groups is not as high as commonly feared, at 0.5% to 2% above normal rates.
For all socio-economic groups, market-rate construction in their neighborhoods is associated with a slightly higher chance of making a downward move—a move to a lower-opportunity neighborhood.
Rent stabilization helps residents of the lowest socioeconomic status stay in their neighborhoods, but it also prevents other low-income people from moving in and may have exclusionary impacts.
Just cause eviction protections help the lowest socioeconomic status residents remain in gentrifying neighborhoods, where displacement pressures may be especially strong for vulnerable residents. However, these protections do not encourage new low-income residents to move in.
Renters make fewer downward moves from neighborhoods where more units are covered by just cause protections—suggesting people are able to make planned moves in these neighborhoods.
Together, these findings reveal that equitable solutions to the housing crisis will require more than just new housing production and tenant protections–these are complementary solutions, but not enough.
To address the housing affordability crisis and mitigate displacement and exclusion, policymakers must pursue not only the preservation of unsubsidized affordable housing, but also bolder initiatives that substantially expand social housing.
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.
Our study’s findings improve on those of other studies because we examine the socio-economic status of households that move, rather than assuming that households have the same characteristics as their overall neighborhood. By accounting separately for both moves in and moves out of neighborhoods by socio-economic status, we are better able to pinpoint how market-rate development, subsidized development, and tenant protections (both just cause eviction and rent stabilization) impact both direct and exclusionary displacement, by looking at movement both out of and into local neighborhoods over a four-year period.
Find the full report here.
Disclaimer: The views expressed in this report are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of San Francisco or the Federal Reserve System.
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