In response to struggling renters and frustrated first‑time buyers, rich‑world politicians champion building more cheap homes. Yet if self‑styled socialists such as Zohran Mamdani and Britain’s incoming prime minister Andy Burnham are serious about housing affordability, they ought to drop platitudes for evidence and embrace the construction of more expensive ones instead.

High construction costs and a thicket of regulation mean private developers often struggle to make the economics of large‑scale social housing projects stack up. Burnham’s plans to build more affordable homes could require an extra £10bn a year in subsidies, and politicians often overpromise and underdeliver on low‑price house‑building projects. While Burnham oversaw a boom in supply as mayor of Greater Manchester, the most significant developments were glitzy, high‑rise apartment blocks, which the populist left have criticised.

Above all, high‑end developments unlock long housing chains. As higher‑income households move into newly built units, they free up older properties, raising supply and slashing prices for middle‑ and lower‑end housing through filtering. A 2021 study in Helsinki found that every 100 new market‑rate units in the city centre led to around 60 units becoming available in the city’s bottom half of neighbourhoods by income. An analysis across all homes in Sweden over several decades concluded that “new homes, even those initially primarily inhabited by rich people, lead to substantial trickle‑down effects that also benefit the poor”. A newly built 512‑unit condominium tower in Honolulu also created 557 vacancies in older apartments.

Social housing has, however, been shown to have the opposite effect. It can discourage tenants from moving in search of better jobs if that means letting go of subsidients. Without regular reassessments, improving incomes can mean relatively rich tenants end up occupying subsidised homes. Nearly 400,000 UK council tenants have household incomes 60 per cent higher than the national average, yet some of the poorest may struggle to buy or rent without targeted support.