What policies increase the availability of affordable housing? One possibility adopted in New Jersey, Massachusetts, and New York City is to mandate that new housing developments have a small percentage of units set aside and priced for low- and moderate-income households. Another is to reduce policy constraints on new construction and allow the effects of the increased new supply to “filter down” to existing units whose owners have to reduce price to maintain occupancy.

Affordable housing advocates often favor set-asides rather than unconstrained new construction because they predict that new construction will increase rents on existing surrounding housing. The higher incomes of the new residents will lead to the development of nearby commercial amenities (restaurants and stores) that will increase housing demand more than the new supply. The policy result of this view has been inclusionary zoning rather than unconstrained new construction and filtering.

But filtering has been having an intellectual renaissance and policymakers are taking notice. I wrote several years ago about research that demonstrated that a series of short moves (termed “migration chains”) connects new construction and low-income areas, meaning that as new construction expands housing supply, existing housing becomes available for lower-income renters and buyers.

More recent research asks a slightly different question. How does new high-rise construction in New York City affect rents and prices on existing housing withing 500 feet of the new construction? The research design exploits the differences in the plausibly random timing of building completion after permits are granted on nearby rents. After building completion, rental income in nearby properties decreases by 1.6 percent in real terms compared to other areas where new construction has been permitted but not completed. Rents between 500 and 1,000 feet away also decrease but not with 95% confidence. For every 10 percent increase in housing units, local rents decline by 1 percent over the next five years. And condominium sale prices decline by 5.7 percent two years after the completion of a new high-rise nearby.

How about the amenity effect that often worries affordable housing advocates? Completion of a new high-rise in New York City causes a 9 percent increase in local restaurant openings. So new construction increases nearby amenities, but the increase in housing supply is sufficient to reduce nearby housing rents and prices.

Evidence that applied economic policy research affects the policy reasoning of elected officials is scarce. But this paper provides a partial exception. The New York Times reports, “Jabari Brisport, a Brooklyn state senator and democratic socialist, announced last month on Twitter that he now believed that ‘the construction of market rate housing does not raise nearby rents’ after reading a research paper on the effect of housing supply, even as he criticized developers as ‘greedy speculators.’ ”