Even if lower-income households won’t be living in the new construction, creating more of it will prevent bidding wars over existing housing stock.
According to GiveWell research analyst Alexander Berger, approving more market-rate construction in California might help low-income renters more than increased subsidies.
Many experts agree that the low inventory in a desirable place to live like California is driving housing costs up. Because of this, the state has the highest real poverty rate in the country.
Instead of offering more subsidies or expanding subsidized housing, Berger argues that “allowing enough construction so that prices wouldn’t have risen more in California than they have nationally would have helped low-income renters a lot.”