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 new supply at any price point benefits renters across the income spectrum.
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.
Who does filtering help most?
The evidence is clear: filtering delivers the largest rent reductions for renters in the oldest and cheapest homes. Research by Mast (2023) tracked the chain of moves triggered by new construction in US cities and found that vacancies cascaded down the income ladder, with the strongest effects on Class C housing stock — the oldest, most affordable privately rented homes. Renters at the bottom of the market benefited most.
This is the opposite of the critics' claim. New homes built for higher-income households do not just help people who can already afford them. They free up cheaper homes for everyone below them on the income ladder, and the effect is largest at the cheapest end of the market.
Where we stand
YIMBY Glasgow believes the evidence. New homes of all types — including those built for higher-income households — benefit everyone, and the biggest beneficiaries are the poorest renters. That is why we endorse policies designed to make it easier to build more homes: planning reform, reduced regulatory barriers, and faster approvals. The evidence shows this is the most effective way to reduce rents and improve housing conditions for the people who need it most.
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 — adding to demand and 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.
The filtering evidence shows that even homes built for higher-income households contribute to affordability across the board.