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The Impact of Housing Production on Legal Eviction

in San Francisco
Kate Pennington
Supervised by Joshua Switzky and Pedro Peterson
June 8, 2018

1 Introduction
San Francisco has become one of the most expensive places to live in the United States, as the
city adds high-wage jobs faster than it adds housing. Housing prices have soared 141% over the
last 15 years1 and 48% of the population is ‘rent burdened,’ spending more than a third of their
monthly income on housing (Chan and Jush, 2017). These cost increases are driving many longtime
residents away, changing the city’s income distribution and racial diversity. Between 1990 and
2015, San Francisco’s African American population shrank by 45%.2 A 2015 study by the Board of
Supervisors budget and legislative analyst found that the Mission’s Latino population fell from 60%
in 2000 to 48% in 2015, and predicts that, without action, it will hit 31% in 2025 (City and County
of San Francisco, 2015).
To improve affordability, local policymakers have three main levers to pull: protection, preser-
vation, and production. Protection means enacting policies that help keep current residents housed
– for example, rent control, rent support, and just cause eviction. Longtime renters who lose a rent
controlled unit often cannot afford a nearby unit at the current market rate. Freshly listed units rent
for 29% premium over the median rent (Chan and Jush, 2017). In 2006, 17% of recently-available
apartments were affordable to a household earning half of the Area Median Income. By 2012, the
share of affordable apartments had fallen to 12% (Chan and Jush, 2017).
Preservation means maintaining the quantity and quality of existing affordable housing. This
includes funding the repair and upkeep of affordable housing and preventing its conversion into
market rate housing. San Francisco also preserves the market rate stock. It has become very
difficult to obtain permits to merge two small units into one large unit, or to convert housing to non-
residential use. The city has also shifted from a policy of removing illegal units from the housing
stock to legalizing those that are up to code, and loosened restrictions on converting spaces like
in-laws into rentable units.
Finally, production means building new housing. Housing production is the most controversial
policy response to the housing crisis, largely due to debate over its impact on gentrification (the
transformation of a working class area to a middle or high income area) and displacement (the
involuntary outmigration of existing residents). Many advocates and incumbent residents worry that
new market rate development will cause displacement and gentrification to begin in neighborhoods
that have not yet been affected, and to accelerate in neighborhoods already experiencing demographic
change (Lord, 2017). A May 2018 article in San Francisco Magazine asks,“Is This Oakland Developer
Building Sorely Needed Housing—or Dropping Gentrification Bombs?” (Jackson, 2018).
On the other hand, most city planners and economists argue that the path to housing affordability
must include building new units to help bring prices down and provide space for more people who
want to live in the Bay Area. In their 2016 study, Zuk and Chapple (2016) find that both new
market-rate and new subsidized housing reduce displacement pressures across the Bay Area, with
stronger impacts regionally than within specific neighborhoods . A recent LAO report estimates
1 SF City Planning Department
2 SF City Planning Department analysis of IPUMS data

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Figure 1: Potential Impacts of New Construction over Space

that an additional 2 million people will live in San Francisco by 2040 (Environmental Protection
Agency, 2015). Where will they all live?
In theory, new market rate construction could either accelerate or decelerate gentrification and
displacement. Through a supply effect, new construction can bring down prices and slow displace-
ment by reducing competition for existing homes. However, building new housing might also have
spillover effects on nearby housing prices and upgrade decisions that could accelerate the gentri-
fication of nearby buildings. It is also possible that both effects occur at once: new construction
might cause nearby residential units to appreciate in value, increasing the risk of displacement, while
alleviating pressure on units that are further away.
Put differently, it is possible that the supply effect dominates the spillover effect at some distances
but not others. If the supply effect always swamps the spillover effect, then the net impact of new
construction on a given unit will be positive at all distances; if the spillover effect always dominates
the supply effect, it will be negative at all distances; or the net impact may change at some distance
from the new project. Figure 1 plots these three cases, with an increase in displacement risk shown
in red and a decrease in risk shown in blue.
Existing research provides evidence that both these effects exist. Anenberg and Kung (2018) es-
timate the change in rental prices after a simulated increase in the housing stock for major American
cities. They find that increasing housing supply causes prices to fall slightly for high-amenity areas.
Prices fall much more when amenities improve in nearby areas, making them more substitutable for
the desirable high-amenity areas. Many researchers have shown that housing value appreciation is
driven by land use regulations that limit the housing supply (Gyourko and Molloy, 2014; Glaeser
et al., 2005b). Red tape in the construction permitting process can also significantly limit housing
supply and drive up land values. Kok et al. (2014) find that if the number of independent reviews
required for approval of construction increased by one standard deviation in each Bay Area political
jurisdiction, land prices would appreciate by 8%.
Researchers have also documented spillover affects of improving the quality of one building on
the value of nearby buildings. Hornbeck and Keniston (2017) present strong evidence that buildings
near a newly replaced building appreciate in value as a result. If owners of many nearby buildings all
upgrade their building quality, the price appreciation is even greater. They also document that the
effect disappears after 1,339 feet. Redding and Sturm (2016) show that the upgrading of buildings
that were randomly destroyed during the WWII bombing of London led to demographic changes
not only for the inhabitants of the upgraded buildings, but also for other buildings within 200 feet.
Diamond and McQuade (2016) find that building housing through the Low Income Housing Tax
Credit (LIHTC) increases housing prices in low-income areas and decreases prices in high-income

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areas.
A 2017 report commissioned by the California Air Resources Board (CARB) and CalEPA fo-
cuses specifically on gentrification and displacement in San Francisco and Los Angeles (Chapple
et al., 2017). The report investigates the relationship between fixed-rail transit and gentrification
and displacement. They find that new residential development does not cause displacement and
gentrification. In fact, they find that between 2000-2013 “in the Bay Area, over half of market rate
residential development occurred in tracts that did not gentrify.” They conclude that building more
housing near transit would not increase nearby gentrification – but it would help reduce Vehicle
Miles Traveled (VMT), helping to curb local air pollution and greenhouse gas emissions.

1.1 Contribution
This paper provides empirical evidence on the impact of building new market rate and affordable
housing on one clear measure of displacement in San Francisco: the probability of receiving an
eviction notice. This makes an important contribution to understanding the impact of housing
production on displacement in San Francisco, but it does not capture impacts on gentrification or
other measures of displacement. Future work should evaluate impacts on gentrification measured
by changing housing sales prices, rents, and commercial and residential turnover.
This analysis makes an important advancement by using extremely disaggregated data, assem-
bling monthly data on all land parcels in San Francisco from 2003-2017. Past studies have found
that gentrification is slower in the Census block groups that have the most new construction (Zuk
and Chapple, 2016), but this approach may gloss over changes that happen within a smaller spatial
unit (Kinney and Karr, 2017), blur the distinction between displacement and gentrification (Ding
et al., 2016), and confound correlation with causation.
In this study, the large data set and precise observation of construction and eviction notices
enable the use of an event study approach with exacting controls. I control for neighborhood and
property characteristics, as well as neighborhood trends over time induced by economic cycles, to
determine whether a new construction project changes the probability of receiving an eviction notice
in a given month. These controls help isolate the impact of proximity to new construction on the
probability that nearby residents are legally evicted.
The rich data also allow the investigation of a set of key related questions. First, do the impacts
change with proximity to the new construction? Because I use parcel-level data, I can evaluate the
net impact of new construction at any distance. I will present results showing the impact of new
construction on residential units within the same city block; within 0.25km; at 0.25-0.5km; and at
0.5 - 0.75km.
Second, do the impacts of new construction depend on neighborhood characteristics? It could be
the case that spillover effects are stronger in poor neigborhoods while the supply effect is stronger
in richer neighborhoods. In other words, do the impacts vary depending on the location of the new
construction? I study each construction project separately to determine whether their impacts vary
with location. This approach also allows the identification of individual projects which may have
had an outsized impact on evictions.
Finally, are the impacts of building market rate housing different from the impacts of building
affordable housing? I study market rate and affordable projects separately to identify differences
in their impacts. I also study the impact of projects that replace an existing building with a new
building of the same size, i.e., replacing an old single-family home with a new single-family home.
These projects can impact nearby displacement only through a spillover effect, since they do not
change the housing supply.
Together, this set of research questions clearly describes the impact of new construction on the
probability of receiving an eviction notice, and offers insight into the mechanisms underlying the
relationship. The rest of the paper will describe the data; discuss the empirical approach; present
results; and then conclude.

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2 Defining displacement
The standard qualitative definition of displacement in sociology and city planning states, “Displace-
ment occurs when any household is forced to move from its residence by conditions which affect the
dwelling or immediate surroundings, and which:
1. are beyond the household’s reasonable ability to control or prevent;
2. occur despite the household’s having met all previously-imposed conditions of occupancy; and
3. make continued occupancy by that household impossible, hazardous, or unaffordable.”
(Grier and Grier, 1980)
Intuitively, we are asking, Was Joe Smith forced to move? This definition is hard to translate into
quantitative measures for two reasons: very few data sets track individuals over space, and even
fewer have information on whether those moves were voluntary.
Using data on evictions solves both problems. By definition, evicted tenants are forced to move
against their will. Although evictions only represent a small portion of potential displacement –
others may move because of rising rents, the gentrification of nearby businesses that may make the
area unaffordable, or harassment by landlords, for example – they are important to study in their
own right and it is reasonable to expect that the eviction rate should be correlated with these other
sources of displacement.

2.1 Linking new construction and evictions


If building new market rate housing increases property values nearby, then neighboring landlords
have an incentive to raise the rents. Landlords of units that are not rent controlled can either simply
set a new monthly rent, or evict existing tenants and set a higher rent in the next lease. Landlords
of rent controlled units can only raise the rent significantly when the existing tenants vacate the
unit (this is known as ‘vacancy decontrol’). Otherwise, annual rent increases are capped in order to
protect affordability for existing tenants.
San Francisco’s rent control laws cover all rental units in buildings with at least 2 units that
were certified for occupancy before June 13, 1979. While the city does not officially track which
units are rent controlled, local policy think tank SPUR estimates that it covers about 75% of the
rental stock.3 Rent controlled units are also protected by “just cause eviction,” which limits the set
of reasons for which landlords can evict a tenant. Although these protections do reduce evictions
(Diamond et al., 2018), they do not prevent them entirely. Landlords of both rent controlled and
uncontrolled units become more likely to evict tenants when their property values rise (Asquith,
2016).
In summary, new market rate housing may affect displacement by driving up the market rent
nearby. Landlords who want to capture this increase have an incentive to evict current tenants.

2.2 What the evictions data can and cannot say


Just cause eviction law requires landlords of rent controlled buildings to file a formal eviction notice
with the San Francisco Rent Board (SFRB). Landlords of uncontrolled buildings are not required to
submit a formal notice to SFRB. To capture uncontrolled evictions, I use filings from San Francisco
Superior Court records, which include single-family homes, evictions from condominiums, and un-
controlled apartments.4 This study includes all eviction notices and all court records from 2003-2017.
For simplicity, I will refer to these notices and filings collectively as ‘notices.’
3 http://www.spur.org/sites/default/files/publications pdfs/SPUR 8 Ways to Make San Francisco More

Affordable.pdf
4 These filings were culled by Brian Asquith’s research team and generously shared upon request. Asquith is a

Postdoctoral Fellow in the Economics of An Aging Workforce at the National Bureau of Economic Research and a
Visiting Postdoctoral Fellow at Harvard University.

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In both rent controlled and uncontrolled buildings, eviction notices differ from completed evic-
tions. First, some landlords compel, harass, or intimidate tenants into leaving without formally
evicting them. Second, some landlords and tenants negotiate a solution; for example, a tenant who
receives a notice for eviction due to nonpayment of rent may complete the payment. For this rea-
son, it is important to keep in mind that measuring eviction notices is not the same as measuring
evictions. Unfortunately, there is no data source that tracks all actual evictions, although commu-
nity efforts like the Eviction Defense Collaborative provide in-depth qualitative information on the
experiences of some evicted tenants as well as information on their annual service provision. In the
absence of complete data on actual eviction events, eviction notices are the best available measure
of eviction activity.
This study can only provide evidence on the probability of legal eviction, measured by receiving
an eviction notice. Illegal evictions may be more responsive to new construction than legal evictions.
However, since landlords all face the same incentives, it is unlikely that illegal evictions would react
oppositely to legal evictions – that is, it is unlikely that legal evictions would increase while illegal
evictions decrease, or vice versa. In this way, the results for legal evictions may provide a lower
bound on the impact of new construction on illegal evictions.

3 Data
The foundation for this study is a detailed panel of all residential and commercial land parcels in San
Francisco, observed in each month from 2003-2017. I match data on housing units from the Office of
the Assessor to the land parcel, observing the number of housing units, year built (and consequently
the implied rent control status), and number of bedrooms and bathrooms. Of the 161,341 parcels
in the data, 81.7% are zoned to permit residential space.

Table 1: San Francisco Land Parcels, 2003-2017

Statistic Mean St. Dev. Min Max


Year Built 1931.66 23.831 1791 2017
Units 2.37 17.69 0 4,000
Rooms 10.23 40.08 0 11,124
Bedrooms 1.12 12.78 0 3,800
Bathrooms 3.00 11.08 0 1,028

3.1 New Construction


Next, I merge in data on new housing construction from 2003-2017 at the month level from the City
Planning Department. To focus explicitly on new construction, I remove demolitions, mergers or
splits of existing units, legalizations, and corrections of the record. For this reason, the numbers
presented here are larger than the numbers in the annual Housing Inventory. Table 2 presents
summary statistics.
Since 2003, San Francisco has completed an average of 2,758 net new units per year from con-
struction, with stark drops from 2010-2012 since fewer construction projects began during the Great
Recession. Most of these new units are market rate, although the number of affordable units has
been trending up. In 2017, more than 25% of new units completed were income restricted to be af-
fordable to low-income residents. This analysis defines market rate construction as any project that
is not completely income restricted and adds net units to the housing stock. Affordable projects add
net income-restricted units to the housing stock. Replacement projects do not change the number
of housing units.

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To investigate whether the impact of new construction on formal evictions changes with proxim-
ity, I need to calculate the distance from each parcel to a parcel with new construction. To do this,
I use the City’s spatial data on land parcels. About 30% of the land parcels in San Francisco are
located within the same block as a new construction project that began during the study period.
Figure 2 maps new projects, showing that there has been construction in every region of the city,
with large-scale developments concentrated in the northeast.

Table 2: Net Units from New Construction, 2003-2017

Year N Projects Net Net Affordable N Projects


Completed Units Units Begun
2003 217 2,824 88 199
2004 194 1,897 35 218
2005 212 2,013 806 248
2006 204 1,836 484 157
2007 175 2,572 696 140
2008 189 3,424 823 108
2009 201 3,690 1,051 113
2010 112 1,103 449 87
2011 99 359 186 71
2012 102 910 416 205
2013 186 2,001 597 204
2014 144 3,283 604 136
2015 217 2,788 460 150
2016 243 5,671 751 77
2017 239 4,237 1,303 26
Total 2,734 38,608 8,749 2,139
Note: Net units were calculated from city data after removing demoli-
tions, mergers or splits of existing units, legalizations, and corrections of
the record.

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Number of Units ●
1−2 ● 3−19 ● 20+

Figure 2: New Construction, 2003-2017

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3.2 Eviction notices
I combine data on evictions from rent controlled units from the San Francisco Rent Board with
San Francisco Superior Court records of evictions from uncontrolled units, from 2003-present. To
evict a tenant, landlords must get a court order restoring their right to the unit. Then the landlord
must give the tenant written notice. In most cases, tenants receive a 3-day, 30-day, 60-day or 90-
day notice. If the tenant has not vacated by the end of the notice period, the landlord can file an
Unlawful Detainer to compel the tenant either to leave or try the case in court.
Some residential units receive several notices within a short time span. These are likely to be
repeat notices to the same tenant. To avoid double-counting potential eviction events, I keep the
first eviction notice issued to the same residential address within a 90-day notice window.5
Figure 4 plots the number of total and for cause eviction notices issued. Roughly 1,400 eviction
notices are issued each year, with a significant drop during the Great Recession. Most of these
notices are issued “for cause,” that is, for one of 15 reasons that a landlord can legally evict a tenant
from a rent controlled unit without penalty (typically habitual late payment of rent, nuisance, and
breaches of the lease). The remaining “no fault” evictions may be condominium conversions, owner
move-ins (OMI’s), demolitions, substantial rehabilitation, and Ellis Act evictions. Figure 3.2 maps
evictions across the city. Both for cause and no fault eviction notices are issued in every residential
area.

Table 3: Annual Evictions, 2003-2017

Year Total % No N/1000


Fault Units
2003 1, 561 0.50 7.03
2004 1, 571 0.52 7.07
2005 1, 527 0.45 6.87
2006 1, 377 0.44 6.20
2007 1, 299 0.37 5.85
2008 1, 276 0.37 5.74
2009 1, 030 0.31 4.64
2010 1, 165 0.31 5.24
2011 1, 296 0.32 5.83
2012 1, 429 0.37 6.43
2013 1, 650 0.39 7.43
2014 1, 770 0.35 7.97
2015 1, 831 0.39 8.24
2016 1, 570 0.41 7.07
2017 1, 353 0.44 6.09
Mean 1, 447 0.40 6.51
Total 21, 705 - -
Note: To calculate the number of evictions
per 1,000 units, I divide the number of
evictions by the number of renter-occupied
units reported by the 2010 Census.

5 For
this reason, these eviction notice counts are slightly lower than the count in evictions data available on SF
Open Data, which includes all eviction notices issued.

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Figure 3: Eviction Notices in San Francisco, 2003-2017

Figure 4: Annual Evictions, 2003-2017

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4 Empirical Approach
This study takes advantage of the rich parcel-level data to isolate the impact of new construction
using event studies. Intuitively, every tenant has some small baseline risk of receiving an eviction
notice in a given month. I use event study regressions to study whether this baseline risk changes
in the months before and after new construction is completed.
The baseline risk of legal eviction may be related to characteristics of the neighborhood or
housing unit. For example, units closer to transit or with views of the Bay may be more valuable,
so that they have a higher baseline risk of eviction compared to units far from transit without
beautiful views. I control for the characteristics of each land parcel, including square footage,
number of units, proximity to transit options like BART, Muni, and Caltrain, access to recreational
areas like Golden Gate Park, views of the bay, and other amenities.
I also control for factors that change over time. For example, the Great Recession affected both
the rate of new housing construction and the baseline risk of eviction. I control for this and other
time-trending factors, such as the founding of large new tech companies and housing prices in other
Bay Area cities. Please see the technical appendix for the regression specification and discussion.
The next section presents these results visually using event study charts. On each chart, the
x-axis is a timeline of months before and after construction. The dotted vertical line marks month
0, the month in which the project was completed.
The y-axis is the estimated increase or decrease in the probability of an eviction notice being
issued in that month, measured in percentage points. A dot located at x = 12, y = 0.01 would
mean that the probability of eviction increases by one percentage point 12 months after project
completion.
Each month also has a vertical gray line that marks the 95% confidence interval for its estimate.
Points within a confidence interval are statistically indistinguishable: it is not possible to differen-
tiate between them. This means that any estimated effect whose confidence interval spans y = 0 is
statistically indistinguishable from 0. For example, if the dot located at x = 12, y = 0.01 had a 95%
confidence interval that started at −0.01 and ended at 0.03, it would be statistically equivalent to
0.
What would a significant impact look like? If market rate housing increased the probability of
legal eviction, then the point estimates for the months before the project would be close to 0 and
their 95% confidence intervals would contain 0. That is, there would be no pre-construction impact.
After the new project (or perhaps even starting a few months before, during its construction), we
would see point estimates above 0 and statistically different from 0. That is, we would expect to
see an increase in the probability of legal eviction after the new construction.
This approach is appealing because it reveals what is happening in each month, rather than
collapsing effects into a single pre-period and post-period. To study a single pre- and post-period,
the researcher would have to choose the cutoff between pre- and post-construction. But in this
case, effects may begin before project completion, perhaps at the date a new permit is posted at
the site, the date ground is broken, the date the building looks finished, or somewhere in between.
Plotting monthly effects also shows whether they evolve over time. This makes the results more
transparent.
After identifying the impact of new construction in each month, I use a simple linear regression
to test whether these coefficients are different on average after the new construction. This answers
the question, Does the average probability of eviction change after project completion? Next, I test
whether neighborhoods are trending differently over time by including a linear time trend. Finally,
it is possible that the impacts of new construction evolve over time. For example, spillover effects
may gather momentum as more and more landlords upgrade their properties in reaction to the

10
new construction. I test for impacts that evolve over time using a linear regression that interacts
a time trend with a dummy variable for new construction. The technical appendix describes these
regressions in detail.

5 Results
This section presents results. I begin with event study charts for the impact of new construction
on eviction within the same city block, separately for market rate, affordable, and replacement
construction. Next, I present regression results for average pre-post impacts, neighborhood trends,
and effects that evolve over time. Then I test the impact of new construction over distance. Finally,
I analyze the impacts of new construction for each individual project to determine whether their
impacts vary with location or whether a particular project had an unusual impact.

5.1 Impact on the Probability of Eviction Within the Same City Block
Figure 5 presents event study charts for new market rate, affordable, and replacement construction.
Each chart displays estimates for the monthly change in the probability that an eviction notice is
issued to a parcel within the same block as a construction project. Let’s first consider the chart for
market rate construction.
The coefficients on months far before the new project are small and indistinguishable from 0.
This means that there is no impact of a project being under construction. Next, notice that the
coefficients do not change significantly after time 0. Each of these point estimates is a precisely
estimated zero, no larger than 0.05 percentage points and always statistically indistinguishable from
zero. This means that the monthly probability of an eviction notice being issued does not change
due to the completion of new housing nearby.
The impact of building new affordable housing is similar. Again, the coefficients on months 0-5
years prior to project completion are precise zeroes. The only coefficients different from zero occur
at 8 months prior and 44 months after completion. These coefficients imply that the probability of
eviction increases by one tenth of a percentage point 8 months prior and 44 months after completion.
However, neither coefficient is significant at the 99% confidence level and both are negligible in size.
Building affordable housing does not impact the probability of legal evictions nearby, either.
Finally, the results for building replacement are similar. Neither before nor after completion is
there any significant impact on the probability that an eviction notice is issued. This offers evidence
that the spillover effect does not play a role here: improving the quality of a building in the same
block does not increase the likelihood of nearby legal evictions.
Even though new construction has no significant impact at the monthly level, it is possible that
the average post-construction monthly coefficients are different from the pre-construction coeffi-
cients. On average, are the post coefficients higher? It is also possible that the impacts of new
construction might trend differently over time, or that the impacts gather momentum over time.
Table 4 displays the results from testing for these three possibilities. Columns (1), (4), and (7) test
for a mean shift after building new market rate, affordable, and replacement housing, respectively.
A positive and significant coefficient on “New” would indicate that the probability of receiving an
eviction notice had increased on average after new construction. For all three construction types,
I find a precisely estimated zero: the average probability of legal eviction does not change due to
new construction.
Columns (2), (5), and (8) test whether evictions are trending differently in areas close to new
construction. I find precisely estimated zeroes for market rate housing: the probability of legal
eviction is not changing differently over time in areas that see more market rate development

11
relative to areas that do not have development. For affordable housing, project completion causes
a small average increase (0.03 percentage points, significant at the 1% level) in the probability of
legal eviction which decreases slowly over time after completion (-0.00 percentage points per month,
also significant at the 1% level).
The effect of building replacement is opposite, with a negligible average decrease in evictions
after project completion that increases over time. This provides further evidence against a spillover
effect on the probability of displacement via legal eviction.
Finally, columns (3), (6), and (9) test whether the impact of new construction on eviction
gathers momentum over time. Again, I find no impact for market rate housing. For affordable
housing, I find that the small initial increase of 0.03 percentage points decays over time, falling by
0.001 percentage points each month. This net impact becomes 0 in month 30, and from then on it
is negative, indicating a decrease in the probability of legal eviction. Replacement housing reduces
the monthly probability of receiving a notice by a constant 0.03 percentage points.
Together, these results show that building new construction – whether market rate, affordable,
or replacement of existing stock – does not significantly affect legal evictions within the same city
block. There is some evidence that new affordable housing may cause a slight initial increase in
risk that decays over time until it becomes a decrease, and that replacement housing may cause a
small constant decrease.

5.2 Impact of New Construction by Distance


Next, I investigate impacts on parcels at different distances from new construction projects. Do
impacts change with distance? Do new construction projects cause an increase in evictions nearby,
but relieve pressure on housing units further away? Using spatial data on land parcels, I identify
parcels within a radius of a new construction project, as illustrated by Figure 1.
I find that the impacts within 0.25km, 0.25-0.5km, and 0.5-0.75km are nearly identical to the
impacts within the same city block. Tables 5, 6, and 7 display results from testing for mean shifts
in the probability of eviction after new construction; different trends near new construction; and
evolving impacts over time.
At all three distances, there is no evidence that legal eviction became more likely after the
completion of the new project. This is true for all types of construction – market rate, affordable,
and replacement. Adding a time trend (see columns 2, 5, and 8) suggests that new construction
actually reduces the probability of nearby evictions, but only by a tenth of a percentage point.
Allowing for the impacts of the new construction to evolve over time (columns 3, 6, and 9)
reveals that on average the probablity of eviction decreased by 0.1 percentage points after project
completion, and decreased by a further hundredth of a percentage point in every month afterwards.
Taken together, these results imply that a unit located within 0.25km of a new construction project
is 0.28 percentage points less likely to receive an eviction notice three years after the project was
completed. Although this is a small reduction, it affects about one third of the residential units in
the city. This offers evidence of a mild supply effect, with building more housing helping to reduce
the likelihood of legal eviction over time.

12
13

Figure 5: Event Studies


Table 4: Evaluating Trends in Evictions Before and After New Construction

Dependent variable: Monthly effect from event study

Market Rate Affordable Replacement


Average Evolving Average Evolving Average Evolving
Effect After Time Trend Impacts Effect After Time Trend Impacts Effect After Time Trend Impacts
Completion Over Time Completion Over Time Completion Over Time
(1) (2) (3) (4) (5) (6) (7) (8) (9)

New 0.00002 −0.00003 −0.00003 0.00004 0.0003∗∗∗ 0.0003∗∗∗ −0.0001 −0.0003∗∗ −0.0003∗∗
(0.00004) (0.0001) (0.0001) (0.00005) (0.0001) (0.0001) (0.0001) (0.0001) (0.0001)

M 0.00000 0.00000 −0.00000∗∗∗ −0.00001∗∗∗ 0.00000∗ 0.00000∗∗


14

(0.00000) (0.00000) (0.00000) (0.00000) (0.00000) (0.00000)

New:M −0.00000 0.00000 −0.00000


(0.00000) (0.00000) (0.00000)

Constant 0.00002 0.00005 0.0001 0.00003 −0.0001 −0.0002∗∗ 0.00001 0.0001 0.0001∗
(0.00003) (0.00004) (0.0001) (0.00003) (0.0001) (0.0001) (0.00004) (0.0001) (0.0001)

Observations 121 121 121 121 121 121 121 121 121
R2 0.002 0.006 0.009 0.005 0.071 0.091 0.015 0.047 0.057
F Statistic 0.202 0.384 0.353 0.554 4.488∗∗ 3.924∗∗ 1.861 2.888∗ 2.362∗
(df = 1; (df = 2; (df = 3; (df = 1; (df = 2; (df = 3; (df = 1; (df = 2; (df = 3;
119) 118) 117) 119) 118) 117) 119) 118) 117)
Note: In each regression, the dependent variable is the effect estimated in the event study for each event-month M . N ew is a dummy variable equal
to 1 if a new construction project has been completed by event-month M . Statistical significance is shown with ∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01.
Table 5: Impacts within 0.25km

Dependent variable: Monthly effect from event study

Market Rate Affordable Replacement


Average Evolving Average Evolving Average Evolving
Effect After Time Trend Impacts Effect After Time Trend Impacts Effect After Time Trend Impacts
Completion Over Time Completion Over Time Completion Over Time
(1) (2) (3) (4) (5) (6) (7) (8) (9)

New 0.0002 −0.001∗ −0.001∗∗ 0.0002 −0.001∗ −0.001∗∗ −0.001∗ −0.002 −0.002∗
(0.0002) (0.0005) (0.0004) (0.0002) (0.0005) (0.0004) (0.001) (0.001) (0.001)

M 0.00002∗∗∗ 0.00005∗∗∗ 0.00002∗∗∗ 0.00005∗∗∗ 0.00002 0.0001∗∗∗


(0.00001) (0.00001) (0.00001) (0.00001) (0.00002) (0.00003)

New:M −0.0001∗∗∗ −0.0001∗∗∗ −0.0001∗∗∗


(0.00001) (0.00001) (0.00004)
15

Constant 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗ 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗ −0.005∗∗∗ −0.005∗∗∗ −0.003∗∗∗
(0.0002) (0.0003) (0.0003) (0.0002) (0.0003) (0.0003) (0.0005) (0.001) (0.001)

Observations 121 121 121 121 121 121 121 121 121
R2 0.007 0.069 0.187 0.007 0.069 0.187 0.023 0.030 0.120
F Statistic 0.830 4.377∗∗ 8.969∗∗∗ 0.830 4.377∗∗ 8.969∗∗∗ 2.859∗ 1.843 5.324∗∗∗
(df = 1; 119) (df = 2; 118) (df = 3; 117) (df = 1; 119) (df = 2; 118) (df = 3; 117) (df = 1; 119) (df = 2; 118) (df = 3; 117)
Note: In each regression, the dependent variable is the effect estimated in the event study for each event-month M . N ew is a dummy variable equal
to 1 if a new construction project has been completed by event-month M . Statistical significance is shown with ∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01.
Table 6: Impact at 0.25-0.5km

Dependent variable: Monthly effect from event study

Market Rate Affordable Replacement


Average Evolving Average Evolving Average Evolving
Effect After Time Trend Impacts Effect After Time Trend Impacts Effect After Time Trend Impacts
Completion Over Time Completion Over Time Completion Over Time
(1) (2) (3) (4) (5) (6) (7) (8) (9)

New 0.0002 −0.001∗ −0.001∗∗ 0.0002 −0.001∗ −0.001∗∗ 0.0002 −0.001∗ −0.001∗∗
(0.0002) (0.0005) (0.0004) (0.0002) (0.0005) (0.0004) (0.0002) (0.0005) (0.0004)

M 0.00002∗∗∗ 0.00005∗∗∗ 0.00002∗∗∗ 0.00005∗∗∗ 0.00002∗∗∗ 0.00005∗∗∗


(0.00001) (0.00001) (0.00001) (0.00001) (0.00001) (0.00001)

New:M −0.0001∗∗∗ −0.0001∗∗∗ −0.0001∗∗∗


(0.00001) (0.00001) (0.00001)
16

Constant 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗ 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗ 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗
(0.0002) (0.0003) (0.0003) (0.0002) (0.0003) (0.0003) (0.0002) (0.0003) (0.0003)

Observations 121 121 121 121 121 121 121 121 121
R2 0.007 0.069 0.187 0.007 0.069 0.187 0.007 0.069 0.187
F Statistic 0.830 4.377∗∗ 8.969∗∗∗ 0.830 4.377∗∗ 8.969∗∗∗ 0.830 4.377∗∗ 8.969∗∗∗
(df = 1; 119) (df = 2; 118) (df = 3; 117) (df = 1; 119) (df = 2; 118) (df = 3; 117) (df = 1; 119) (df = 2; 118) (df = 3; 117)
Note: In each regression, the dependent variable is the effect estimated in the event study for each event-month M . N ew is a dummy variable equal
to 1 if a new construction project has been completed by event-month M . Statistical significance is shown with ∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01.
Table 7: Impact at 0.5-0.75km

Dependent variable: Monthly effect from event study

Market Rate Affordable Replacement


Average Evolving Average Evolving Average Evolving
Effect After Time Trend Impacts Effect After Time Trend Impacts Effect After Time Trend Impacts
Completion Over Time Completion Over Time Completion Over Time
(1) (2) (3) (4) (5) (6) (7) (8) (9)

New 0.0002 −0.001∗ −0.001∗∗ 0.0002 −0.001∗ −0.001∗∗ 0.0002 −0.001∗ −0.001∗∗
(0.0002) (0.0005) (0.0004) (0.0002) (0.0005) (0.0004) (0.0002) (0.0005) (0.0004)

M 0.00002∗∗∗ 0.00005∗∗∗ 0.00002∗∗∗ 0.00005∗∗∗ 0.00002∗∗∗ 0.00005∗∗∗


(0.00001) (0.00001) (0.00001) (0.00001) (0.00001) (0.00001)

New:M −0.0001∗∗∗ −0.0001∗∗∗ −0.0001∗∗∗


(0.00001) (0.00001) (0.00001)
17

Constant 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗ 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗ 0.0004∗∗ 0.001∗∗∗ 0.002∗∗∗
(0.0002) (0.0003) (0.0003) (0.0002) (0.0003) (0.0003) (0.0002) (0.0003) (0.0003)

Observations 121 121 121 121 121 121 121 121 121
R2 0.007 0.069 0.187 0.007 0.069 0.187 0.007 0.069 0.187
F Statistic 0.830 4.377∗∗ 8.969∗∗∗ 0.830 4.377∗∗ 8.969∗∗∗ 0.830 4.377∗∗ 8.969∗∗∗
(df = 1; 119) (df = 2; 118) (df = 3; 117) (df = 1; 119) (df = 2; 118) (df = 3; 117) 0.830 (df = 1; 119) (df = 2; 118) (df = 3; 117)
Note: In each regression, the dependent variable is the effect estimated in the event study for each event-month M . N ew is a dummy variable equal
to 1 if a new construction project has been completed by event-month M . Statistical significance is shown with ∗ p<0.1; ∗∗ p<0.05; ∗∗∗ p<0.01.
5.3 Impact of Individual Construction Projects
The previous two sections show that new construction has no significant impact on the average
probability of receiving an eviction notice, whether for market rate, affordable, or replacement
construction, and no matter the distance from the project. If anything, new construction slightly
reduces the risk of legal eviction. However, particular projects might have exceptional impacts due
to their location – it may matter whether a large market rate project is built in the Mission or in
the Dogpatch – or some unusual characteristic of the project itself. If so, the insignificant average
results could reflect a canceling out of large opposite effects of particular projects.
To test this, I run separate event studies for each new construction project. Each event study
captures the difference in the probability of an eviction notice being issued within the same block
as a new project relative to a block without a new project, controlling for common trends over time
and for the characteristics of that block. Then I run the same simple linear regression as above to
test whether the average probability of eviction changed after the project was finished. In all, there
are 1,050 blocks with new construction completed between 2003 and 2017. I run 1,050 event studies
and 1,050 linear regressions.
I do not find that any single project had a significant impact on the probability of nearby
evictions. The largest impact I estimate is 0.091 percentage points, consistent with the results from
the previous two sections. This shows that the insignificant average results presented for market
rate, affordable, and replacement construction and for different radii are not masking large opposite
effects from certain projects. Rather, in general, new construction has no impact on the probability
of legal eviction.

6 Conclusion
This study contributes important information to the policy debate on how to address gentrification
and displacement in San Francisco. Housing costs are skyrocketing, leading to the displacement of
low income residents and rapid gentrification that often hits communities of color hardest. Would
building new market rate housing cause these trends to speed up or slow down? New housing
production might accelerate gentrification and displacement through a spillover effect on nearby
housing values, slow them down by bringing down prices, or affect areas differently depending on
neighborhood characteristics or proximity to the new construction.
This study adds new, geographically-specific evidence to the body of existing research. Zuk and
Chapple (2016) find that both market rate and affordable housing construction alleviate regional
displacement pressures, with smaller impacts at the more local Census blockgroup level. In a larger
study, they and coauthors find that gentrification is not related to new construction at the Census
tract level (Chapple et al., 2017). This study zooms in even closer, analyzing the impact of individual
new construction projects on nearby parcels on one clear measure of displacement: the risk of legal
eviction.
Consistent with Zuk and Chapple (2016), I find that new construction does not increase the
likelihood of legal eviction. This is true not only for market rate housing, but also for affordable
housing and building replacements. It is true in all neighborhoods, from the Mission to the Outer
Richmond. In fact, I find evidence that proximity to construction slightly reduces the risk of receiving
a notice over time. It is possible that this mild supply effect would be larger if more housing were
added, as suggested by other studies including Anenberg and Kung (2018) and Glaeser et al. (2005a),
since building more new housing would reduce competition over existing units.
To fully evaluate the impact of new construction on displacement and gentrification, future re-
search should examine a fuller set of measures. As discussed earlier, eviction notices are not a perfect
measure of evictions. Illegal eviction through harassment or intimidation may be more responsive
to nearby new construction. Furthermore, evictions are not a complete measure of displacement
or gentrification. Studying legal evictions is important, but other key outcomes may be affected

18
differently.
Future work can apply this methodology to other key indicators of gentrification, such as changing
housing prices, rents, and commercial and residential turnover. The results from rigorous empir-
ical work can clarify the impacts different policy options, helping cities like San Francisco choose
strategies that effectively address the rapid demographic change that is currently unfolding.

19
References
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21
7 Technical Appendix
7.1 Event Studies
This study takes advantage of the richness of the parcel-level data to isolate the impact of new
construction on eviction. I use an event study approach that calculates changes the probability of
eviction in each month before and after a new project is permitted or completed nearby. This allows
us to see whether impacts evolve over time and to remain agnostic over when they might begin –
whether at the date a new permit is posted at the site, the date ground is broken, the date the
project is completed, or somewhere in between.
I use a linear probability model whose dependent variable is a dummy equal to 1 if an eviction
notice was issued to parcel i in month t that is within radius r of a new construction project. Because
the dependent variable is binary, coefficients on explanatory variables are interpreted as changes in
the probability that evictionitr = 1.
Since each project is finished on a different calendar date, I translate project completion into
event time τ . Event time τ equals 0 in the month of project completion; τ < 0 in the months before
completion and τ > 0 after. We want to know whether the probability of eviction is on average
higher or lower in a given month before or after a new project is completed.
Next, I create event time dummy variables Mτ for each parcel within radius r of the new project.
These dummies are equal to 1 if event time = τ and 0 otherwise. For example, M0 = 1 in the
month of completion and 0 otherwise. I include event time dummies for each month in the five-year
envelope around the completion of a new project, so that τ ∈ [−60, 60].
The regression equation is:

X
evictionitr = α + βτ Mτ,itr + µt + γi + θnt + uitr (1)
τ

where α is an intercept that captures the average level of evictionitr ; µt are month-year fixed
effects; γi are land parcel fixed effects; the Mτ,it are a set of event time dummies; and θnt captures
neighborhood-level trends. (The results are not sensitive to including θnt , but they do help increase
precision.) Standard errors are clustered at the level of treatment, the area defined by radius r.
The month-year fixed effects control for all factors that are trending the same way over time for
all land parcels: for example, the Great Recession, the founding of large new tech companies; housing
prices in other Bay Area cities; etc. The land parcel fixed effects control for all characteristics of
each land parcel that do not change over time, such as proximity to Caltrain, Golden Gate Park, or
other amenities. Variation in the timing of the new construction allows me to separately estimate
the month-year fixed effects and the βτ . Since balancing the panel for a window greater than three
years would reduce the number of projects I can study, instead, I include the full set of event time
dummies and report coefficients only on the windows of interest.
The coefficients of interest are the βτ , which capture the deviation from the yitr in the months
before and after the new construction. For example, if displacement increases after a new project is
completed, we would expect the coefficients on τ > 0 (the months after completion) to be positive
and the coefficients on τ < 0 (the months before completion) to be statistically insignificant.

22
7.2 Testing for Mean Shifts, Trends, and Evolving Impacts
After identifying the impact of new construction on these measures at the month level, I test whether
there is a significant aggregate impact for the post-period compared to the pre. This can be done
with a test for a mean shift in the βτ s – that is, by testing whether the mean effect of being in a
pre-completion month is different from the mean effect of being in a post-completion month:

βˆτ = π0 + π1 1(N ew)τ + τ (2)

The event study may show that different city regions were trending differently before the new
construction. For units in these regions, I control for preexisting trends by including a linear time
trend:

βˆτ = π0 + π1 1(N ew)τ + π2 τ + τ (3)

Finally, it is possible that the impacts of new construction evolve over time. For example, spillover
effects may gather momentum as more and more landlords upgrade their properties in reaction to
the new construction. To test for impacts that evolve over time, I run:

βˆτ = π0 + π1 1(N ew)τ + π2 τ + π3 1(N ew)τ · τ + τ (4)

To test over a set of radii, I create a distance matrix from each land parcel to each new construc-
tion project. Then I define Mτ 6= 0 for all the parcels within a given distance of a new construction
project. Then I run the same event study specification and linear regressions as above.
To test individual projects, I first aggregate the data to the city block level for computational
efficiency. Next, I remove other blocks treated by other new construction projects so that they do
not contaminate the comparison group. Then I define Mτ 6= 0 for the individual project of interest
and run the event study and linear regressions described above.

23