How housing markets actually work
When a new, more expensive flat is built and someone moves in, that person vacates a home somewhere else in the city. The household that moves into their old home vacates another one. And so on down the chain, until the final move creates a vacancy in an older, cheaper property that a lower-income household can now access.
This process — called "filtering" in the academic literature — is how new supply at any price point benefits renters and buyers across the income spectrum. It is not a theoretical abstraction; it is how housing markets have always worked, and there is now substantial empirical evidence confirming it.
The hermit crab analogy
Imagine a line of hermit crabs, each too large for their shell. Place one large empty shell among them: the biggest crab moves in, the next crab moves into the shell it vacated, and so on, until even the smallest crab has a better shell. Building expensive new homes works the same way — the chain of moves benefits households at every income level.
Tracking the chain of moves triggered by new market-rate apartment construction across US cities, Mast found that each new market-rate unit created a chain of roughly three moves, with the final units in the chain occupied by households in the bottom income quintile. New luxury apartments directly freed up affordable housing.
An analysis of US rental market data found that a surge in new construction — consisting almost entirely of higher-end Class A and B units — translated to lower rates of rent growth for lower-quality Class C apartments as well, providing direct empirical confirmation of the filtering effect across the full market.
Studying new centrally-located market-rate housing in Helsinki, researchers found it drew high-income tenants from across the city, reducing competition for existing stock and putting downward pressure on rents city-wide — not just in the immediate vicinity of the new development.
The reduction in nearby rents associated with new market-rate apartment buildings, according to research by Asquith and Mast covering 11 major US cities. New buildings slow local rent increases rather than accelerate them.
Does filtering always work?
The evidence for filtering is strong at the city and regional level — but it is more mixed at the very local, street-by-street level, particularly in rapidly gentrifying neighbourhoods where demand is rising fast. Some studies find rents in the immediate vicinity of new development rise temporarily before the supply effect takes hold.
This does not undermine the overall case for building more homes. It does suggest that planning policy should pay attention to where new development is concentrated, and that social and affordable housing requirements remain important components of any development framework.
Where we stand
Glasgow YIMBY supports requiring meaningful affordable and social housing contributions from private developers through planning conditions. We also support building homes of all types. Opposing private development altogether because it isn't exclusively social housing leads to fewer homes of every kind — and that means higher rents and longer waiting lists for the people least able to absorb them.
The alternative is worse
When cities block or restrict new private development, the high-income households who would have moved into new builds instead compete for existing housing — bidding up rents and prices for everyone below them on the income ladder. Restricting supply at the top is not a strategy that helps people at the bottom. It just compresses the competition into an already-undersupplied market.
Glasgow needs more homes. That means homes of all types — social, mid-market, and private. The filtering evidence shows that even homes built for higher-income households contribute to affordability across the board.