I can understand, however, the criticism of this model, mostly on the grounds of supply & demand. On the micro-level, Alliso Village is a better place - for the poor that live their as well as for the mixed-income residents that now live there. But on the larger level, the number of units available was greatly reduced, and the number of units made for low-income families was even less. In the big picture, how to supply enough affordable housing?

Because the demand for housing in Los Angeles so far outweighs the supply, housing is barely affordable for anyone, let alone the poor. Relying only on the free market to supply housing doesn’t cut it. So what do we do to address that problem?

Affordable housing for the poor is a difficult topic - on the one hand, supply and demand via the price system is the most efficient means of allocating housing, in other words, it will provide the cheapest housing that the market can bare. But when you have such a large amount of demand, that housing price may still be higher than many people can afford. What to do?

The problem with using the government is that in creating ‘affordable housing’, it also increases the demand (or limits the supply, or both) thereby increasing even more the bottom prices of homes - making homes even less affordable to those at the bottom. Add in the fact that the government rarely does anything correctly, and you are left with a government program high on expectations and costs, but little on actual benefits and implementation. The best you can do is classify ‘affordable housing programs’ by the harm they do, and support the ones that do the least harm.

The ideal scenario though is to deal with the reality of the situation - prices mean something, and when the price of homes go up so much that some can’t afford to live in a certain area, that is a sign of the underlying scarcity. The most the government can do is increase supply (reduce, for example, environmental regulations, and other burdensome regulations that limit supply, see here). Those at the bottom have to either work more, wait for higher wages, or move out of the area - nothing else addresses the problem.

For example, I want to have a house overlooking the beach, but so do many other people and the only thing that separates them from me is how much I am willing and can afford to pay for such homes. The government cannot change the underlying scarcity, it can only move things around but in doing so, it makes the allocation of beach homes less efficient, not more.

Again, sorry for the deletion.

Opposing housing projects does not equate to opposing housing assistance to the poor, it just opposes the means of providing housing assistance to the poor.

As I said in the post, there are more efficient means of providing housing to the poor - housing vouchers.

Edgar Olson, professor of economics at the University of Virginia, researched this very thing and found:

“Five major studies have estimated both the cost per unit and the mean market rent of units provided by housing certificates and vouchers and important production programs, namely Public Housing, Section 236, and Section 8 New Construction.1 These studies are based on data from a wide variety of housing markets and for projects built in many different years. Three were multi-million dollar studies conducted for HUD by respected research firms during the Nixon, Ford, Carter, and Reagan administrations. They are unanimous in finding that housing certificates and vouchers provide equally desirable housing at a much lower total cost than any project-based assistance that has been studied, even though all of these studies are biased in favor of project-based assistance to some extent by the omission of certain indirect costs.”

The full study can be found here.

It should also be mentioned that even your premise is unsubstantiated, in other words, ‘affordable housing’ programs by the government do not necessarily translate to overall affordable housing for the poor - in many instances (all?), they translate to more expensive housing, see here.

CHerrera