Wealthier Neighbors and Higher Rents: The Rental Assistance Demonstration and Gentrification

Abstract

Public housing redevelopment is associated with the gentrification of neighborhoods. However, the Rental Assistance Demonstration (RAD), the largest redevelopment program in the U.S. to date, encourages preservation and introduces tenant protections that potentially limit gentrification-related displacement. In the first nationwide study of RAD's impact on neighborhoods, we linked administrative housing data with the American Community Survey and conducted difference-in-differences analyses of 1,141 neighborhoods across the U.S. to ask if RAD has induced changes associated with gentrification. We find that neighborhoods with redevelopment experienced larger gains in middle-class residents and larger losses in very low-income residents compared to similar, untreated neighborhoods. Neighborhoods with RAD also saw larger increases in rental housing costs, and these increases were largest in neighborhoods where redevelopment was extensive. These findings suggest that RAD contributes to gentrification. We use these findings to argue that policymakers must consider the housing stability of public housing's neighbors when planning redevelopment.