Viewpoints: Low-income residents need more market-priced apartments


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Low-income residents need more apartments at market price

Andrew Kane’s point of view

As a graduate student, my income is below the Chapel Hill median. I pay almost half of my income to my landlord. I expect the price of any new Chapel Hill apartment being considered in the Blue Hill area to be overpriced. To help cost-stricken tenants like myself, I hope the City Council will continue to allow development of dense new market-priced apartments in this area as quickly as possible.

Much of the housing debate in Chapel Hill has been framed as a compromise between market-priced apartments and affordable housing. Market-priced apartments are presented as a threat to residents of our city: they squeeze tenants for money, drive up rents and nearby property values, and displace current residents.

This story is false. People are moving here for jobs that will exist no matter how many apartments are built. If we allow developers to build hundreds of new homes for them, they will live there happily, support our local businesses and allow Chapel Hill to better deliver social services with their tax money.

If we don’t build these houses, newcomers still need a place to live. And they will knock on the doors of existing landlords, driving up rents and driving out residents. These overpriced residents still need housing, and they will downgrade to more affordable housing, pushing low-income residents there. The most vulnerable tenants are completely priced out, abandoning our city or becoming homeless.

But Chapel Hill has been building these apartments for a decade and rents continue to rise. Doesn’t this mean that luxury apartments increase in price? Although this idea is intuitively appealing, we confuse the causes of unaffordable prices with their effects. People who drink chicken soup are more likely to get a cold, but we wouldn’t conclude that chicken soup causes colds. Rents are higher because more people want to live here, and newcomers are going to need housing. The rent therefore increases without new housing, these newcomers looking for housing. This need for housing is driving the construction of luxury apartments, reducing the number of newcomers chasing current tenants and driving down rents. It is the need for new housing, not the building of apartments to meet that need, that drives up rents.

This misconception that market-priced apartments drive up rents is the root of the vicious cycle that has gripped San Francisco. For decades young people have flocked to San Francisco for jobs. They needed housing, which drove up local rents. But time and time again, residents blocked construction that would have housed newcomers and demanded tougher restrictions on building apartments. This misguided policy raised rents even further, fueling more resentment toward the very apartments that would have eased San Francisco’s housing crisis. After 40 years of opposition to market-priced apartments, San Francisco is synonymous with widespread homelessness and breathtaking unaffordability.

Instead, let’s follow the example of Minneapolis, which in 2018 made it easier to build market-priced apartments there than in almost any other major city in the country. Construction has skyrocketed from 2,600 building permits per year to 4,000 after 2018. Have rents skyrocketed with all these new high-end apartments? No: Since 2018, rents have fallen, even as Minneapolis’ population grew and inflation drove up prices.

Still not convinced? Let’s look at the science on housing. Evan Mast (2019) finds that new luxury apartments are occupied by residents of older dwellings, and low-income residents may move into newly vacant dwellings. Li (2019) finds that large luxury apartments reduce rents and housing prices in their vicinity. Pennington (2021) shows that market-priced units lower rents by 2% within 300 feet of the new building. Asquith, Mast, and Reed (2019) find that market-priced apartments reduce rent by close to 5%. Bratu, Harjunen, Saarimaa (2021) find that market rate housing reduces rents across the city where housing is located. areas. Each of these studies is written by researchers from academic institutions with no financial interest in housing development. Each article uses state-of-the-art methods to rigorously determine how market-priced housing affects nearby rents and travel. Each article shows that market-priced apartments reduce rents and travel.

The facts are simply not on the side of our neighbors who claim that market-priced apartments are driving out current tenants. The choice for our city is clear: to make Chapel Hill affordable again, we must continue to build market-priced apartments..


Viewpoints on Chapelboro is a recurring series of opinion columns submitted by the community. All thoughts, ideas, opinions and expressions in this series are those of the author and do not reflect the work or reporting of 97.9 The Hill and


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