Some of you are on this listserv and probably saw this, but here is the question I currently have posed to the staunch naysayers:
Zainab and other critics of market rate construction, how do you respond to the research from Asquith, Mast, and Reed finding that adding luxury construction actually decreased adjacent rent in 11 metros compared to placebo gentrifying areas that did not receive new luxury apartment construction?
Preliminary results using a spatial difference-in-differences approach suggest that any induced demand effects are overwhelmed by the effect of increased supply. In neighborhoods where new apartment complexes were completed between 2014-2016, rents in existing units near the new apartments declined relative to neighborhoods that did not see new construction until 2018. Changes in in-migration appear to drive this result. Although the total number of migrants from high-income neighborhoods to the new construction neighborhoods increases after the new units are completed, the number of high-income arrivals to previously existing units actually decreases , as the new units absorb a substantial portion of these households. On the whole, our results suggest that—on average and in the short-run—new construction lowers rents in gentrifying neighborhoods.