Great discussion! I have a question about this: "...zoning reform can’t solve a problem where houses are selling and renting at their construction cost. That’s a problem of people having low incomes and not being able to afford construction costs." Alex, doesn't this miss the filtering effect? Even in lower-income areas facing gentrification pressure, couldn't zoning reform that allows more housing prevent displacement by reducing pressure on existing stock? The new units might be expensive initially, but they absorb demand that would otherwise drive up prices on housing where lower-income residents currently live. Isn't this anti-displacement benefit of zoning reform important even in markets without a large price-to-construction-cost wedge?
Great discussion! I have a question about this: "...zoning reform can’t solve a problem where houses are selling and renting at their construction cost. That’s a problem of people having low incomes and not being able to afford construction costs." Alex, doesn't this miss the filtering effect? Even in lower-income areas facing gentrification pressure, couldn't zoning reform that allows more housing prevent displacement by reducing pressure on existing stock? The new units might be expensive initially, but they absorb demand that would otherwise drive up prices on housing where lower-income residents currently live. Isn't this anti-displacement benefit of zoning reform important even in markets without a large price-to-construction-cost wedge?