[deleted] t1_j4piylk wrote on January 17, 2023 at 10:30 AM

Reply to comment by SerialStateLineXer in New apartment buildings in low-income areas lead to lower rents in nearby housing units. This runs contrary to popular claims that new market-rate housing causes an uptick in rents and leads to the displacement of low-income people. by smurfyjenkins

so how does the more expensive apartment building by me lower housing prices? it's more expensive than houses, what is the incentive for housing prices to drop? why would someone choose a tiny expensive apartment over a large less expensive house? wouldn't it create demand for people who want houses & therefore increase house prices?

cantdressherself t1_j50xbv4 wrote on January 19, 2023 at 5:09 PM

Apartments are substitute goods to houses. Raising rents due to new building can happen but only in specific areas.

Building luxury apartments next to affordable houses has no affect on the demand for affordable houses, unless it pulls a few tenants that really wanted luxury in that location but couldn't get it before.

It can raise property valuations and drive up taxes and attract higher paying renters, (gentrification) but that assumes the supply of renters is endless, which is not the case in most areas.

[deleted] t1_j50xnak wrote on January 19, 2023 at 5:10 PM

yes so simply saying "more housing = lower rent" is obviously not the entire equation

cantdressherself t1_j61sjwn wrote on January 27, 2023 at 2:32 AM

I mean, it will lower the rents somewhere. Maybe not right next door, but someone somewhere lost a buyer or a renter.