Should We Build More Suburban Housing To End The Housing Crisis?

homes under construction surrounded by green fields

While there is general agreement that there is a housing crisis, there are longstanding debates about how to fix it. One of those debates is about where new housing should be built.

Some argue for putting resources into building affordable housing in amenity-rich areas (places with access to schools, employment, transporation and so on). Others take the view that continuing the present trend of building more homes in the suburbs is less costly and more effective.

Finding a way to figure out whether either argument has merit has eluded economists until April 12 this year, when Valentine Gilbert shared research he’s been doing during a webinar hosted by Harvard’s Joint Center for Housing Studies.

Vacancy chains are central to this research. Vacancy chains are created by building new homes. When someone moves into a new unit, the home they left behind becomes the first link in a vacancy chain. When someone else moves into the vacated unit, a new link is added. Vacancy chains create opportunities for people to move to better locations.

Some work had already been done to study the effects of vacancy chains when new units are added in amenity-rich areas. Valentine decided to track the vacancy chains created by building new housing in suburbs. These he compared with the ones in amenity rich neighbourhoods.

Valentine’s research covered the 10 year period from 2008 to 2018 in the United States. His analysis of the evidence does not support the argument that building more suburban housing improves housing opportunities for disadvantaged groups.

Research that can identify who benefits when building new housing is important and timely. Policy makers and decision makers are deliberating on how to allocate resources to improve access to the housing market.

The study methods can also be used to check out other strategies. Programs that add to the density of existing neighbourhoods with triplexes and second suites come to mind. So long as a strategy has been tried in enough places, there is a  possibility to study the vacancy chains and who they benefit.

For further information, the slides and the webinar have been posted at the Joint Center for Housing Studies: Can New Suburban Housing Make Urban Areas More Affordable?