The Unequal Burden of Growth: Housing Cost Pressures on Renters Near High-Profile Firm Entries

• In Event: Kaleidoscope of Impacts on Urban Rental Markets: Arrivals of High-Profile Firms, LIHTC, Filtering, and Natural Disasters

Abstract

Attracting high-profile firms is a central component of place-based economic development strategies pursued by state and local governments, with the goal of stimulating job creation, increasing capital investment, and fostering long-term regional economic growth. While a substantial body of research documents the positive employment and productivity effects associated with firm entry, considerably less attention has been paid to the unintended consequences such growth may generate in local housing markets—particularly in rental sectors where many households are most vulnerable to price pressures. This study examines the impact of high-profile firm entry on rental housing affordability in communities across the state of Georgia, focusing specifically on establishments officially recognized by the state’s economic development agency in recent years. Leveraging original firm-level data and a 13-year (2010–2022) census tract–level panel dataset of housing affordability outcomes, we employ a staggered difference-in-differences research design to estimate the causal effects of firm entry on the prevalence of renter cost burdens across income groups. Our findings reveal important distributional patterns. In particular, the arrival of high-profile firms significantly increases housing cost burdens among moderate-income renters—those earning between 80 and 120 percent of area median income. In contrast, the effects are more muted or statistically negligible for lower-income renters, who are more likely to benefit from housing assistance programs, as well as for higher-income renters, who possess greater financial flexibility. Homeowners, meanwhile, appear largely insulated from these affordability pressures, highlighting the tenure-based asymmetry in how economic growth is experienced. Further analysis suggests that rising demand for housing, coupled with already tight rental market conditions, exacerbates affordability challenges for moderate-income households. This group is especially vulnerable because they often exceed eligibility thresholds for traditional housing assistance programs yet lack sufficient resources to absorb rising rents. Overall, these findings highlight that the benefits of firm-led economic development are unevenly distributed and can generate meaningful spillover effects in rental housing markets. Policymakers and planners should anticipate and proactively address these pressures—through tools such as housing supply expansion, targeted subsidies, or inclusionary policies—to ensure that growth strategies promote not only economic dynamism but also housing affordability and social inclusion.

Author

• Eunjee Son, Georgia Institute of Technology
  Presenting Author