Build expensive apartments now, and wait a few decades.
One of the most common refrains in the affordable housing discussion is “developers are targeting the high end of the market” and new apartments are just unaffordable.
Of course, it’s not that simple. Demand for new housing that isn't met by the construction of new high-end units doesn't disappear, it spills over into more modest housing, driving up rents for everyone. Building more high-end housing helps with affordability, because it keeps those with high incomes from outbidding those with lower incomes for the existing housing stock. (Just imagine what would happen to housing prices if you suddenly demolished 10,000 units of expensive housing.) And often, today’s luxury units become tomorrow’s affordable homes.
To understand this, just look to Portland’s recent history. Housing blogger Iain MacKenzie, who tracks new housing and commercial developments at the definitive Next Portland website, shared with us a couple of fascinating historical clips from the city’s paper of record, The Oregonian. They show that today’s affordable housing often started life as self-described “luxury” housing when it was originally built.
Click for full article: https://www.citylab.com/equity/2017/08/how-luxury-housing-becomes-affordable/535563/