Moving Chains - A housing study from Helsinki, Finland - Yes, new development benefits middle and lower income housing
I read this article years ago and it gives a great insight to debunk the argument that new, expensive housing being built contributes to the unaffordability suffered by our current housing environment. The study shows that through the change of residency to the new developments triggers a chain in which "reach middle- and low-income neighbourhoods quickly, within a year or two" opening up inventory in neighbourhoods of all price-points.
City-wide effects of new housing supply:
Evidence from moving chains
Abstract
We study the city-wide effects of new, centrally-located market-rate housing
supply using geo-coded total population register data from the Helsinki Metropolitan Area. The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market rate construction loosens the housing market in middle- and low-income areas even in the short run. Market-rate supply is likely to improve affordability outside the sub-markets where new construction occurs and to benefit low-income people.
"As new residents move into the newly constructed units, they
vacate their old units. These vacant units then get occupied by a new set of residents whose old units become vacant and so on."
"the moving chains triggered by these new units reach middle- and low-income neighborhoods quickly, within a year or two. Our register data also allows us to show that low-income individuals are part of the moving chains."