New Housing ≠ Affordable Housing: Filtering
This short essay series is inspired by my work on affordable housing policy and development.
Build Baby, Build?
Essay One: Filtering
There is a popular notion being championed across the country: we must build more housing to create affordability. We’ve heard the “build, baby, build” refrain from non-partisan advocates and the Republican and Democrat parties alike. But how real is this apparent solution and, perhaps, a question for another day, how did Democrats get coaxed into using a remixed Sarah Palin line?
Fundamentally, new housing is not distributed fairly. Akin to the food and hunger crisis, the problem is not the lack of food but rather poor distribution. When it comes to housing, I have learned that the apparently obvious realities deserve to be underlined: new homes are exclusively built for households who can pay today’s record-high construction costs, today’s record-high land prices, and of course, today’s financing terms.
“But when one new unit is built, another unit is emptied” say the pro-market advocates. This notion is called ‘filtering’ and is a version of trickle-down economics. If the housing market were fair, predictable, and just this notion would inspire confidence in me, too. Perhaps it’s revealing of people’s worldview and status to consider who this argument placates and who it does not.
To rely on the premise of a unit opening up when a new one is built, we are assuming the following:
That the old house is now for sale or rent
That the price will be affordable to most people
It was secured by an existing local household or incoming working household
If the old house does not meet any of those three realities, the filtering argument falls apart as an honest and practical solution for our local need. If it does meet two or three of those qualifications, hurray!
So Hot Right Now.
Data from Federal Reserve: 2000 - 2025. Pricing data lagging behind compared to Zillow
However, if housing affordability that serves most of our workforce and seniors is not a priority, then build away! Indeed, market-rate housing development can add options. Developments modernize stock and boost tax revenue for governments. At times, I can appreciate the policy arguments being made by some of the ‘build baby build’ folks, especially when they take a holistic view and aren’t just trying to juice for-profit development.
But while YIMBY and pro-market advocates call for the construction in the face of a “shortage of 2 million homes”, perhaps we can also look around at our country’s 15 million vacant houses; about a million of them owned by investors.
In places like the Olympic Peninsula, buildable land is scarce and demand is driven by wealth from outside our local economy. While filtering may occur it can take decades to see results which isn’t a meaningful timeframe that preserves community stability. And time does matter. When workers can’t secure stable, affordable housing businesses close, schools lose enrollment and emergency services strain.
The social fabric thins long before the optimistic filtering occurs. And in the meantime, the new homes being encouraged serves buyers that are generally not making their incomes locally with price points that reinforce the notion that the housing prices are bearable when they just are not.