by Vanguard Staff
Trickle-down housing policy, long promoted by the real estate industry, California YIMBY, and politicians backed by developer money, has failed to deliver the affordable housing California desperately needs.
That’s the central argument of a new piece from Housing Is a Human Right, the housing advocacy division of the AIDS Healthcare Foundation.
In their report, they charge that what they call “trickle-down housing” has not only failed to alleviate California’s housing affordability and homelessness crises but has actively fueled gentrification, displacement, and evictions in working-class communities, particularly those of color.
The phrase “trickle-down housing” draws from a broader economic idea that traces back more than a century. In 1896, presidential candidate William Jennings Bryan offered a contrast between two visions of government: one in which policies are designed to enrich the wealthy in the hope that prosperity would eventually leak down to the masses, and another in which the focus is on improving the conditions of the many in the belief that prosperity would rise up through every class.
The term “trickle-down” itself gained wider currency during the Great Depression, when humorist Will Rogers criticized Herbert Hoover’s handling of the economic collapse.
“The money was all appropriated for the top in the hopes that it would trickle down to the needy,” Rogers wrote. “They saved the big banks, but the little ones went up the flue.”
In the 1980s, trickle-down theory reached the heights of U.S. policymaking under President Ronald Reagan, who argued that cutting taxes for corporations and the wealthy would spur economic growth that would benefit everyone.
But over the years, study after study has shown that trickle-down economics overwhelmingly benefited the wealthy and powerful while doing little to help working-class Americans. The model fueled economic inequality and diverted public resources into private hands, with little evidence that the promised benefits ever reached those who needed them most.
Even President Joe Biden denounced the model in a 2021 speech to Congress, stating plainly, “Trickle-down economics has never worked.”
Despite its track record of failure, the trickle-down model persists in California’s housing debate. Politicians, developers, and organizations like California YIMBY have argued for years that the housing crisis is simply a matter of supply and demand. Flood the market with market-rate—and often luxury—housing, they say, and prices will come down over time.
The underlying assumption is that even if new housing is too expensive for most residents today, it will eventually “filter” down and become affordable. Housing Is a Human Right argues that this logic is not only flawed but dangerous. It’s being used to justify the demolition of rent-controlled apartments, the repeal of local zoning regulations, and the rejection of tenant protections—all in the name of an abstract future affordability that never arrives.
This version of trickle-down housing, they say, masks a political project: deregulating land use to maximize developer profits. In recent years, California legislators have introduced controversial bills like SB 827 and SB 50, which would have overridden local zoning to allow taller, denser development near transit corridors. While billed as solutions to the housing crisis, these measures were heavily backed by real estate interests, big tech, and pro-development groups, and widely opposed by tenant unions, anti-displacement activists, and equity-focused urban planners. The bills were ultimately defeated, but the underlying policy orientation remains dominant in Sacramento.
Data from the real estate site Zillow supports the advocates’ concerns. Zillow found that developers overwhelmingly focus on building luxury housing, not the affordable units that low- and moderate-income Californians need. According to Zillow Chief Economist Svenja Gudell, “Apartment construction at the low end needs to start ramping up, and soon, in order to see real improvements.” In the meantime, the data shows tenants are paying more and more. Between 2010 and 2019, U.S. renters paid an astonishing $4.5 trillion in rent. In 2019 alone, renters in Los Angeles paid $39.1 billion to landlords; San Francisco renters paid $16.4 billion; and San Diego renters paid $10.3 billion. These staggering figures reflect a transfer of wealth from renters to corporate landlords, with little relief in sight.
As the report notes, deregulating land use and incentivizing private developers to build expensive housing in low-income areas has contributed directly to displacement and gentrification. Communities of color, where land is often cheaper and zoning restrictions less stringent, have become prime targets for speculative development. Instead of preserving existing affordable housing, cities have allowed developers to demolish it—often rent-controlled or older units—and replace it with high-end condos or luxury rentals. In 2016, the Los Angeles Times reported that more than 20,000 rent-controlled units had been removed from the market in L.A. to make way for new construction. That number has likely increased since.
This loss of affordable housing is not accidental. It’s baked into the current policy model, which Housing Is a Human Right describes as deeply self-serving. Developers make massive profits building and leasing luxury units. Landlords benefit from rising market rents. Politicians receive campaign contributions from the real estate industry. And YIMBY groups, many of which receive funding from tech interests or developer-aligned nonprofits, continue to promote a worldview that aligns neatly with elite economic interests. But for renters—especially those in working-class communities—the costs are devastating.
Even prominent urban theorists once aligned with YIMBY principles have begun to question trickle-down logic. Richard Florida, who helped popularize the concept of the “creative class” as a force for urban renewal, has warned that “the markets—and neighborhoods—for luxury and affordable housing are very different, and it is unlikely that any increases in high-end supply would trickle down to less advantaged groups.” His remarks reflect a growing recognition that simply building more market-rate housing is not a substitute for targeted affordable housing policy.
In Fresno, housing activist Grecia Elenes described how trickle-down housing is playing out on the ground. “There’s a strong will to not build affordable housing or mixed-income housing,” she told Housing Is a Human Right.
“The people who have the most money are developers and lobbying organizations. There’s a lack of political will to go against that… The development industry has a real strong hold on City Hall.”
Housing Is a Human Right proposes a three-part strategy known as the “3 Ps”: protect tenants through strong rent control and anti-eviction measures, preserve existing affordable housing by preventing demolition and displacement, and produce new affordable and deeply subsidized housing through public investment and cost-effective construction methods.
This approach, they argue, addresses the crisis from multiple angles—and, most importantly, centers the needs of the people most harmed by the status quo.
In contrast to trickle-down promises, the 3 Ps approach offers a grounded, equitable path forward. It begins by recognizing that housing is a human right—not a commodity to be bought, sold, and speculated on. And it demands that state and local governments stop relying on private developers to solve public problems.
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California YIMBY Grecia Elenes Herbert Hoover Housing is a human right Joe Biden Los Angeles Times Richard Florida Ronald Reagan Trickle-down housing Zillow