"One well-worn refrain of progressive urban politics is that new, "luxury" housing will not help solve the housing shortage. A 2024 study of U.S. voters found that 30 to 40 percent believed more housing would, instead, increase prices, and another 30 percent believed it would have no effect. But research generally points in the other direction: More housing supply of all kinds leads to lower prices in general terms."
"In the paper, three researchers looked in extraordinary detail at the effects of a new 43-story condo project in Honolulu. The building, called the Central, sits right behind the giant Ala Moana shopping center, halfway between downtown and the beachfront hotels of Waikiki. It comprises both subsidized and market-rate units, priced at around $780,000 for the former, and $1.25 million for the latter."
"The paper estimates the tower's 512 units created at least 557 vacancies across the city-with some units opening up no empty apartments (if, say, an adult child moved to the Central from their parents' home) and others creating as many as four vacancies around town. To figure this out, the researchers had to go into detective mode. They traced buyers arriving at the new apartments back to their previous homes and then, in some cases, they traced the new occupants of those homes back to prior addresses."
The Central, a 43-story condominium near Ala Moana in Honolulu, added 512 units including subsidized units priced around $780,000 and market-rate units around $1.25 million. New occupants of the tower left older, cheaper apartments that became available to households from still-cheaper homes, producing a cascading chain of moves up the housing ladder. The tower generated at least 557 vacancies across the city, with some moves creating no net vacancy and others creating up to four. Buyers moving into the Central left units roughly 38 percent cheaper per square foot than their new apartments.
Read at The Atlantic
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