Growing numbers of affordable housing advocates and community members are questioning the premise that increasing the supply of market rate housing will result in housing that is more affordable. Many advocates oppose new development unless it serves the households at the very lowest end of the income distribution currently in place in the neighborhood. Community members across a wide range of incomes fear that any new development will attract high income households, leading their neighborhoods to gentrify and become unaffordable to them. In the face of rising prices, both groups are seeking to defeat development proposals and arguing for policies to restrict new development, such as moratoria, downzonings, requirements for community benefit agreements, and more rigorous approval processes. In those arguments, advocates and community members often find themselves on the same side as those who oppose development for reasons having nothing to do with affordability, but are focused instead on protection of historic streetscapes, low density character, individual viewsheds, or other traditional not-in-my-backyard concerns. This confluence of opposition is becoming a powerful block against development proposals. Yet most economists and housing policy experts argue that creating new homes is essential in cities and localities facing rising rents and prices.

Opposition to new development has long been expected from homeowners who benefit from the higher housing prices they believe will result from limits on supply (Fischel, 2001). But opposition to new development now also comes from renters and others who advocate for lower rents and housing prices. Those opponents share what we call “supply skepticism” – the belief that additional market rate housing does not help make housing more affordable, and indeed may increase rents and prices. 1 First, skeptics argue that the bundling of land with housing fundamentally alters demand and supply relations, and that land in many high-cost cities is such a constrained good that it should be devoted to affordable housing, because any market rate housing will come at the direct expense of affordable homes. Second, skeptics assert that the new development is usually priced at the highest end of the market, and argue that adding supply at the top end will do little or nothing for low- or middle-income families.