What We Don’t Know About Development and Displacement

From left, Vicki Been, Jamaal Green, and Miriam Zuk.

The data on the relationship between new development, affordability, and displacement is not nearly as clear-cut as advocates (of all persuasions) often imply. We spoke with several researchers about why that is, what kinds of data we need more of, and how we should approach housing policy in the meantime. Thanks to Vicki Been, former New York City commissioner of housing preservation and development and faculty director at the New York University Furman Center; Jamaal Green, a doctoral candidate at Portland State University; and Miriam Zuk, director of the Urban Displacement Project and the Center for Community Innovation at University of California–Berkeley for sharing their insights with us.

Miriam Axel-Lute: There is disagreement about what housing supply and anti-displacement research show. Certain parts are highly disputed, especially the question of whether incoming market-rate development in previously lower-income areas raise rents in the immediate vicinity, sometimes called the “block effect.” Why is it so hard for folks to agree on what we know and don’t know?

Vicki Been: There are a couple of things going on. One is that there are inconsistent definitions about what counts as displacement. It can range from “I left my house” [to] “I had to leave my neighborhood” to “I can’t move to a neighborhood that I used to be able to afford.” Some people [include] “I left because the neighborhood was so disinvested.” There’s a variety of definitions of displacement, and that’s one of the things that confuses the picture.

[Also] there are differences between researchers in terms of when they start to look for displacement. When we would expect to see it? And then what do we compare it to in order to define displacement?

People with low incomes move a lot for a variety of reasons. There’s a lot of instability in their lives. If you’re comparing the mobility rates of one neighborhood to another, both of which have a lot of low-income households, you’re going to see a lot of movement. What’s the right comparison group?

Miriam Zuk: The lack of agreement is [due to] the lack of research. When luxury condos are going up in a neighborhood [that is] changing rapidly, people who have been living there for a long time say this is going to raise rents and make it impossible to live in this neighborhood. We simply don’t have enough research to say where that’s happening and specifically what that looks like. The types of studies that may prove or disprove that just aren’t out there yet and may not ever help us in understanding or in solving those disputes about whether this is happening.

Jamaal Green: There is little understanding and little desire to understand the idea of sub-markets in anything close to a rigorous fashion. [The] debate breaks down precisely because people cannot or will not try and discuss sub-markets. And the block problem is all about sub-markets.

[The debate] breaks down when folks on one side cite [only Ed] Glaeser and on the other side they cite [only Loretta] Lees. These people are talking about fundamentally different frames and approaches and scales.

 

How are sub-markets related to the block effect?

Green: We know there are different kinds of houses for different kinds of customer segments. We have segments based on price and on their spatial relation within a greater city. Two houses that are priced the same, but one is in the middle of downtown and one is 40 miles away, exist in the same price segment but not [in] the same housing sub-market.

When you think about your customer base and your good base as being segmented on the basis of price and space, the localized effects of new development become very difficult to ascertain.

Been: The truth of the matter is that in 2019, we still lack a lot of basic data. It’s very hard to get rents at a sub-market level or at a disaggregated level so that we can figure out what the sub-markets are. We don’t know nearly as much as we need to know about where lower-income folks are living and how that’s changing. We’ve seen pretty dramatic change, at least in some cities, of the ownership of even single-family homes that have suddenly become much more renter-occupied.

Even in New York City, about half of our low-income renters live in one- to three-family rentals. There’s a lot of change going on in terms of who owns the buildings, what they’re doing with them, and how the market is changing. We just don’t have good data.

We also don’t have good data that allows us to follow a household. Obviously there are some panel studies, but it’s hard to actually track where a household is living, how long they’ve been there, where they go, how that household reconfigures, etc. And unfortunately, with attacks on the census and increasing concerns about privacy and the ability to match census data with other marketing sets, it may become even harder.

 

Are there entities that could make it easier? What would it look like if we had what we needed to answer some of these questions? 

Zuk: We’re getting better data. We’re starting to work with some credit score data that allows us to follow people over time, but it doesn’t tell us some critical things that we know are important, like race.

[There are also] some things that data may not be able to answer for us, but we know the answers. We know that as neighborhoods become hotter markets—and if developers are choosing to develop high-end luxury developments in those neighborhoods—those neighborhoods are demanding higher prices, and low-income families are going to struggle to stay in those neighborhoods.

Data will inevitably be lacking. We’re never going to get a complete data set about where everybody is moving and why they’re moving. Although we’re all researchers, and although we probably all see the value in data, the constant search for the perfect data set is not really going to solve our problems.

Been: I agree. We will never have perfect data, or if we do, the problem will have long since passed or solved itself, or reached a crisis point. Nevertheless, we can also push for better data sources. There’s always going to be gaps, but you can’t let the perfect be the enemy of the good.

My colleagues Ingrid Ellen and Sherry Glied are using Medicaid data—[which] only looks at a slice of the community, but it’s a very important slice—to track households over time. We need to do a lot more of that. We need to push a lot further to get good data that can help us.

 

Do you agree that there are things about housing supply and demand effects on cost that we actually know despite lack of complete data?  

Green: Amongst people who do research, serious advocates, and people who work policy, there is some common understanding. We can debate the local impacts of new development, but for severely supply-constrained, high-demand cities—the main one that people use all the time now is San Francisco—you have to build more, and you have to remove barriers to building. There’s only so much that rent control is going to do in the face of ever-increasing demand.

We should be able to build more; [it’s] an insufficient response, but a necessary one. And that’s going to require people on either side of this debate to come in and say, “OK, what are going to be the next steps?”

It is difficult for smaller builders, thanks to permitting and different kinds of regulations and changes in the tax structure. [The] small-builder class has been wiped out in many states. And those were people who were generally pretty good at helping to rehab or build working-class housing. Now you have this bifurcation of the development market, which is basically dominated by massive development companies, and they generally build where they’re going to get their greatest return at the high end of the market.

Absent a real estate crash, you’re not going to get filtering fast enough to reach the most precarious of renters, or even many working-class renters. There are multiple ways we can get to that, but we have put a couple of things aside. And one of them is for strong-market cities in cases of high demand and insufficient supply, we have to figure out how to choose supply.

 

You mentioned timing. I think that’s one of the key dynamics that comes into some of these debates. Even when you need to build more, all the supply that is needed isn’t going to come immediately. Maybe in 5 or 10 years, once you’ve added these big towers in the neighborhood, the regional median rent may go down a small amount. That doesn’t mean that in my block, the addition of these buildings didn’t make this a more appealing place for investors, and my personal rent went up more than that in the short term. Folks who are precarious are looking at right now, not even two years out, and the location where they are look at effects on rents is right around their homes, not regionally.  

Been: There’s also something else going on, which is why should I take the risk? Why should I support the building or not oppose the building, when I don’t know? That’s the whole dysfunction of many of the homeowner types of opposition to new development. I don’t want to take any risk that something will affect my property value, so I’ll just oppose it.

Zuk: If you’re a property owner, you would be concerned about the risk of your property value going down from new development, not vice versa, [as renters are].

Been: I’m arguing that that’s become, in some places, a coalition. Property owners [and] homeowners concerned that there’s a risk that their property value might go down, and renters concerned that there’s a risk that their rents might go up. There’s a coalition in opposition to new development [whose members] are coming from completely opposite assessments of what’s going to happen. But, in both cases, they’re worried about the risk.

Zuk: I see the property owner risk as less about their values and more their neighborhood changing. So much of the opposition is about that, just fear and uncertainty about the future.

That again goes back to Jamaal’s point about sub-markets and this feeling about who the development [is] for: is it for me or is it for somebody else?

Green: Yes. Part of the reason why groups are talking past each other is that they’re talking about different things. I’ve tried to make the point that housing supply policy is related to but distinct from anti-displacement policy. We need to be clear about that. If you are concerned about displacement, housing supply increase can help with that, but there are more efficient or more direct policies to keep people from being involuntarily displaced. Neither side seems to want to give ground on these being distinct policy areas. Either side only sees one particular policy, either loosening zoning or rent control as the solution to both. And that’s just not the case.

 

I’ve heard a number of people say we want anti-displacement policy in place before adding a whole bunch of market-rate housing here. But if that’s in place, then, in theory, fine.

Been: The trouble with that is you have jurisdictions that actually have a lot of anti-displacement tools in place. New York has rent regulation. We have a very vibrant preservation policy—25,000 units [were] preserved last year, for example. We have an anti-harassment ordinance. We have property tax abatements and exemptions for low-income homeowners who see their property values go up. We have universal access to counsel. And we still get opposition to new development.

We should constantly re-evaluate those policies and try to figure out where they aren’t meeting the need and what could fill that need. But it’s a little bit of a moving goalpost.

Zuk: There is also the case where people are using displacement as a smokescreen. We saw with SB 827, people from Marin County and Hollywood saying they were concerned about displacement when that was not what was motivating their opposition to that upzoning bill. [You need to] try to understand the real motivation and be skeptical when you hear people using key terms to try to stop a development from happening.

Something that we’ve been exploring at Urban Displacement Project is if you have some sort of citywide policy, how is it taking effect locally or in a specific neighborhood? Are there additional resources targeted to that neighborhood that is seeing this rapid change? Are you matching the anti-displacement efforts to the scale of the pressure? This goes back to research. We don’t have a good enough understanding of the potential scale of the impact so that we’re able to match the response to the additional pressure.

 

There’s also a question of how we’re defining areas that are at risk for gentrification/displacement.

Been: I would agree. When I was serving as commissioner of housing, we were sued for one of our anti-displacement tools, which is a community preference policy. We were asked why [we didn’t] just identify where the areas that are going to gentrify, and then limit the community preference to only the areas that are going to gentrify? And I said if I could identify all the areas that would definitely gentrify, at least income-wise, I’d be in the wrong business. We don’t always know which kinds of government policies, which kinds of investments, which kinds of market trends, etc., are necessarily going to lead [to gentrification] and when they’re going to lead [to gentrification]. It is very hard to match this up.

 

Given all these uncertainties, how do we identify areas that are at risk for displacement when we’re looking at anti-displacement policy?

Zuk: We’ve been doing a lot of work trying to identify places that are currently undergoing gentrification displacement, and places at risk. We did identify that a lot of the places SB 827 would have upzoned were places that were already experiencing risk of displacement and gentrification.

One thing that we’re working on right now is differentiating between the types of displacement. So disinvestment-related displacement, investment-related displacement, and exclusionary displacement. That will help us in trying to identify mitigations and policy solutions. When seeing those overlays and looking at maps, it’s like, do you really think that this super-segregated, high-poverty neighborhood is at risk of displacement? Those are high displacement areas already.

Understanding the causes is really critical there. One of our big critiques of SB 827 was that it was talking about upzoning high-resource neighborhoods and becoming a desegregation policy. In fact, a lot of the neighborhoods that were going to be upzoned were not necessarily high-resource, exclusive neighborhoods as they were being described.

As we get more data and as we have more tools for mapping, [we must] be really specific about what’s happening in these neighborhoods now, what are the kinds of risks and vulnerabilities of the people that live there, what are the kinds of changes that we want to see into the future, and how can we make sure that people living there now are able to benefit from those changes. We’re starting to see some of that. We’ve been working on, in California, [with] the Fair Housing Task Force, trying to target LIHTC [Low Income Housing Tax Credit] dollars to high-resource neighborhoods. In San Francisco, they were able to use our maps and pass it by HUD for targeting their preference to neighborhoods that are gentrifying.

As more data comes available, as we are doing a better job at predicting, we can incrementally get a better idea of what’s driving these changes [to] do a better job at both targeting policies and thinking about prevention of displacement and unintended consequences. 

Been: One of the many tragedies about the suspension of the [HUD] assessment of fair housing requirement is that those assessments provide a systematic opportunity to do exactly that kind of thinking, and to take it and to look at it through a broader lens. It’s so frustrating to hear people say, well, we should be concerned about displacement from gentrification, when a lot of the displacement is from disinvestment and people leaving neighborhoods because the housing is so bad, the schools are so bad, [and] the crime is so high. We need to be concerned about all of that. The assessments of fair housing gave a way to really systematically do that. I hope that many jurisdictions will continue to think about it in that way even with the AFH suspended.

 

How would you hope people could approach these policy conversations, given that we don’t know as much as people tend to claim that we do about these dynamics? 

Been: One thing that would be helpful is if there were more recognition [that we are] comparing to a counter-factual. You will often hear, “Well, you built more housing and my rent still went up.” But of course, the question is how much would it have gone up had that housing not been built, or would there have been gentrification even if you hadn’t done X, Y, or Z.

The discussion about what’s wrong or what’s missing from the evidence about investment has been helpful, because you’re seeing a lot of research that’s trying to correct those problems. We need more qualitative research that asks people why [they are] leaving and, if [they’re] not moving, how are [they] managing to stay if rents are going up.

Having those discussions about what’s missing can be very helpful in spurring more research. We need a lot more when it comes to tools for anti-displacement. We’ve got a lot of tools, many of which have not really been evaluated seriously in terms of where they work, under what circumstances they work, and how they can be made to work better.

Zuk: We are constantly being asked at Urban Displacement Project what works. And unfortunately, there’s so little data and evidence and research on this. We’re starting a new line of research on the effectiveness of different policies around anti-displacement, and we just certainly need a lot more of it.

What I would like to see is more consensus-building. Both sides argue about these issues, anti-displacement activists on one side and the YIMBYs on the other, although I’m sure there’s tons more arguments. At the end, there’s a common vision and future that they could get on the same page about, which would be about inclusive cities. Both of these groups have their own constituents, but some cross-group coalition-building and really seeing a common future could really help this out.

There’s so many policies that these groups could find common ground on. Less of us seeing each other as antagonists, and [instead] working together could go a long way.

Been: There’s going to be an increasing need for a coalition, because with changes in the Supreme Court and in the lower federal courts, some of the anti-displacement tools are going to come under attack. We need to start coalition-building and start to join forces on defending that.

Green: This can be something that city planning departments, housing departments, or community development departments can start to work on, but it would require professional courage to be willing make some really explicit, normative, and political claims. Many departments that are discouraged from doing such a thing.

Norm Krumholtz used to say the power of municipal planners is in helping to frame a problem. There’s power in that, and I would like to see planners do more with it.

Exclusionary suburbs are still this black box that folks don’t necessarily want to touch. If we still want to talk about exclusion, the center of that is still the suburbs, not the central cities.

 

The L.A. Times did a poll recently that asked why housing was so expensive in California, and lack of supply was way down on the bottom. There’s still a perception gap there from the broader public.

Been: One thing there is that people don’t understand—and here maybe some of the fault is in those of us who are researchers and communicating some of these issues—is people don’t understand what the supply numbers really are and what they have to be. And we don’t have a good way of saying this is how much supply the area needs. California’s tried to do some of that. We tried to do some of that in one of our reports. But it’s really contested. It’s really hard.

In New York, you hear all the time [that] the only thing being built are luxury high-rises. If you look at the numbers, you see a tremendous amount of six-story middle- and moderate-income housing being built around the city, but that’s not what people notice. It’s not what’s in the pages of the newspaper. We need a better understanding of what actually is being built, how much of it, [and] how that compares to other times when you were seeing similar growth rates. We need a better lens through which to view how to measure what’s actually getting built, where it’s getting built, and at what price points.

Green: I’d also say that the scale question matters. I get annoyed at people who insist that the only scale you need to be thinking about is the metro level. If you live in the central city, and you’re “only” displaced to the fringe of the metro, that could be 30 miles away. That matters. When people talk about “median rents at the metro level have dropped,” that doesn’t mean anything. People hurt their argument when they try to score sophomoric points around supply, which is where we get into the block debate. Questions of scale need to be talked about more explicitly. If we see rents dropping at the metro level, that can be good, but we should be cognizant that people don’t live at the metro level. People live in their neighborhood. People live in their city. We should be trying to better contextualize that or looking at how those effects work differently as we go up and down the scale.

Zuk: A lot of times, our cities use the real estate data available to them. And what might make sense to the real estate industry isn’t necessarily meaningful to neighborhoods and people. How many more decades of research on neighborhood effects do we need to do to remind people that neighborhoods matter? Everybody knows neighborhoods matter. Everybody knows that place matters. And yet we still keep talking at these levels that aren’t necessarily meaningful to people.

This is one area where I think that mapping is important. We were able to convince people from the regional governments who said, hey, as long as you’re able to stay in the Bay Area, that’s not displacement. We were able to show them it is displacement. Our resegregation report talks about how, when low-income families are displaced, they are moving to worse-off neighborhoods. We all intuitively know this, but until you show a map, a lot of people are able to wave their hands. We need to be reminding people about the neighborhood context of this and not just be lulled into the sweeping, “Everything’s OK because, at the metro level, rents are going down.” What does that mean for my neighborhood?

Been: Right. Looking at the metro level also allows suburbs and exclusionary neighborhoods to be ignored. In the New York metro area [last year], New York City was responsible for more than 70 percent of the new building. The metro area is meeting needs, but not in all of those suburbs that are not building. It hides a lot.

 

Anything else you want our readers to know? 

Been: We do need a better understanding of how the people who stay in a neighborhood that is gentrifying manage that. Are they paying a higher portion of their income in rent? Are they making more money? Also, we need to be paying attention to the cultural displacement issues. In gentrifying neighborhoods, you get a lot more 311 calls. Those are really important issues. We need to be thinking about tools for anti-cultural displacement.

Zuk: [In] our new study on resegregation, we’re finding if you move anywhere, even if you’re moving to a lower-cost neighborhood, and you’re displaced, your housing cost burden is going up. In California, housing costs are going up everywhere.

Thinking about the impacts and consequences of displacement and about how this is hurting families is really important to contextualize why we’re doing this work, why we’re focusing on anti-displacement.

Been: We looked at the top 53 metros by population and looked at the premium difference between the rents that sitting tenants are paying and the rents they have to pay if they move, not just to new buildings but to any [unit] recently [put] on the market. The premiums are just horrendous. In some cities they were just off the charts, the amount that you would end up paying just to move, not necessarily to [anything] better, bigger, or different, just the premium of on-the-market units versus sitting tenants.

That also points in the direction of needing more anti-displacement tools that are aimed at that instability displacement. Can we find ways to have a two-month loan or whatever, because moving is really a bad thing for many people.

Green: I would love to see planners and planning departments try and take a more proactive role to, at minimum, set the frames and become an area where we can try to discuss these issues in a better fashion instead of simply holding inefficient meetings where people get to yell at each other.

Been: From your lips to God’s ears, Jamaal.

 

Thank you.

3 COMMENTS

  1. Wow — thank you! Yes. This is the conversation that addresses what’s happening in my city, where we argue and argue about whether it’s best to allow developers to build high rises, ostensibly to meet demand and thereby reduce rents, or keep them out because if they build, everyone’s rent will go up. Can the Urban Displacement Project please come work with my city?

  2. To me, there’s a specific way to form that anti-displacement-YIMBY coalition that the discussants were mentioning that we should talk about more: Pro-supply policies should be able to make anti-displacement policies work better. For instance: More market rate housing production=higher vacancy rates and lower rents and therefore a wider variety of choices for HCV holders. The same zoning changes and procedural reforms that reduce the cost and risk of developing market rate housing will also do the same for nonprofit developers. If they would just talk more, as the discussants suggest, the two groups might find that their interests are more aligned than they realize.

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