ABSTRACT
An "income strategy"—giving the poor additional income—would produce, in the short run, a demand for housing services greatly in excess of the supply. This chapter shows that an income strategy must be accompanied by government measures to speed the response of the housing supply. If the incomes of the central-city poor were rapidly increased, the immediate effect would be a sharp rise in the price of existing housing stock. Construction technology, work practices and wage rates, land prices, building materials costs, and interest rates determine the prices at which such minimum quality housing units must sell or rent. Few central cities have any supply of unoccupied decent housing into which people could move now that their higher incomes permitted them to pay higher rents or prices. The addition to the supply of housing that can be provided by the construction industry within a short period is only a small fraction of the existing housing supply.
