High housing construction rates benefit low-income households, new dissertation shows

On June 10, Gabriella Kindström successfully defended her dissertation Urban Dynamics and Contemporary Challenges: Essays on Housing and Neighborhood Amenities.

Gabriella Kindström. Foto: Mikael Wallerstedt.
The dissertation explores contemporary urban challenges in a Swedish context. Through four essays, Gabriella Kindström examines issues such as housing inequality, gentrification, and residential segregation.
In the first essay, she investigates how new housing construction affects the distribution of housing across income groups. While newly built homes are initially occupied primarily by high-income earners, the resulting mobility frees up older housing stock for lower-income households. As the housing ages, it becomes more accessible to individuals with lower incomes, and after about 30 years, the income distribution among residents levels out.
Kindström finds that in municipalities with higher housing construction rates, all income groups gain better access to newer housing and increased living space. Her conclusion is that new housing—even when initially occupied by higher-income households—stimulates mobility in the housing market that ultimately benefits low-income households.
The second essay examines whether large-scale housing development can revitalize disadvantaged neighborhoods. The results show that new, large condominium projects built at market prices lead to a 15% increase in average income in the poorest quartile of neighborhoods. Moreover, incomes in existing housing within these neighborhoods rise by 10%, indicating improved neighborhood attractiveness. Since new housing may also enhance local amenities such as retail and services, the precise cause of rising housing prices remains ambiguous.
In the third essay, Kindström analyzes the effects of new housing on local property prices. The results show price increases in low-income neighborhoods and price declines in high-income areas—possibly due to increased housing density.
The fourth essay focuses on the impact of school closures on neighborhoods. Using geocoded Swedish microdata covering the entire population, Kindström shows that school closures reduce the share of high-income residents in affected areas, especially among families with children. This segregation effect is more pronounced in urban areas, whereas in rural regions, school closures primarily contribute to depopulation.