This paper explores the dynamics of housing affordability through the lens of new market-rate housing construction and its impact on migration chains across neighborhoods. Utilizing detailed address history data, the study documents how new housing developments initiate sequences of residential moves that ultimately reach diverse socioeconomic areas, including low-income neighborhoods. Empirical findings reveal that a significant proportion of new building residents originate from nearby high-income areas, but over successive rounds of migration, this composition diversifies to include more residents from lower-income backgrounds. Through simulation exercises, the study estimates that a substantial portion of these migration chains initiated by high-end housing units eventually reach below-median income neighborhoods, thereby potentially alleviating demand pressures in these areas. The study underscores the role of increased housing supply in mitigating affordability challenges in the short term, though acknowledging uncertainties around long-term price effects and the potential for endogenous responses such as out-of-metro migration. These insights suggest implications for housing policy aimed at balancing market incentives with affordability goals across metropolitan regions.

https://www.sciencedirect.com/science/article/abs/pii/S0094119021000656