FBI surged resources to Minnesota over day care fraud claims before video went viral, Patel says
https://www.youtube.com/watch?v=r8AulCA1aOQ
https://x.com/nickshirleyy/status/2004642794862961123
FBI surged resources to Minnesota over day care fraud claims before video went viral, Patel says
A YouTube video purporting to show day care facilities that arenât operational but received state and federal funding went viral over the weekend.
By Corky Siemaszko and David Ingram
December 29, 2025
The FBI went into overdrive to investigate suspected fraud at nearly a dozen Minnesota social services after a YouTube video purporting to show day care facilities that arenât operational but receiving state and federal funding went viral over the weekend.
FBI Director Kash Patel posted on X that he was aware of the video, created by right-wing influencer Nick Shirley, but insisted the FBI had already âsurgedâ investigative resources and personnel to Minnesota as part of its ongoing fraud investigation that has largely targeted Somali immigrants.
âThe FBI believes this is just the tip of a very large iceberg,â Patel posted Sunday on X.
Meanwhile, Minnesota Gov. Tim Walzâs office defended its ongoing efforts to crack down on fraud when it was asked about the video.
âThe governor has worked for years to crack down on fraud and ask the state legislature for more authority to take aggressive action,â a spokesperson for the governorâs office said in an email. âHe has strengthened oversight â including launching investigations into these specific facilities, one of which was already closed.â
The Justice Department has been running a sprawling fraud investigation involving some members of Minnesotaâs Somali community for years.
In 2022, during the Biden administration, federal prosecutors announced initial indictments in what they called a $250 million scheme to defraud a federally funded child nutrition program. As of last month, prosecutors had charged 77 people. They described Aimee Bock, who is white, as the mastermind of the operation. A jury convicted her in March.
Shirley, 23, who describes himself as an independent journalist, put the subject of Minnesota fraud in the spotlight of conservative media in recent days. His report out of Minneapolis was quickly championed by Vice President JD Vance, Elon Musk and various right-wing outlets. His video has been viewed millions of times on X and YouTube.
âHere is the full 42 minutes of my crew and I exposing Minnesota fraud, this might be my most important work yet,â Shirley said online. âWe uncovered over $110,000,000 in ONE day.â
Among other things, the video features Shirley in front of what appears to be an inactive child care center in Minneapolis with a sign that reads âQuality Learing Center,â including an apparent misspelling of âlearning.â
Shirley contends it received $1.9 million âfrom the governmentâ this year.
âThis is open and blatant fraud taking place here,â Shirley insists, calling it âjust one of the hundreds of child daycare centers here inside of Minneapolis being ran by the Somali population.â
Shirley, who did not immediately respond to a request for comment, is no stranger to right-wing media. He did a live interview with a protester at the Jan. 6, 2021, riot â who was later sentenced to prison before being pardoned by President Donald Trump â that he posted on YouTube.
His YouTube channel says it has 1.2 million followers, and he regularly posts political content, including person-on-the-street interviews from numerous locations. In October, he was a guest at a White House conference on antifa, a decentralized set of extreme left-wing groups.
There was no answer when an NBC News reporter called the child care center Monday. A Child Learning Center at that address in Minneapolis is licensed with the state to care for 99 children. The state has fined the facility twice since 2022 for allegedly not performing a required background check, and several violations were listed from its most recent licensing visit in June.
The state Department of Children, Youth, and Families did not immediately respond to a request for comment on Shirleyâs claim that this facility received $1.9 million in government funding in 2025.
But DCYF commissioner Tikki Brown said at a Monday news conference that Quality Learning Center was closed last week and another center that Shirley visited had been shut down earlier.
Brown, according to The Minneapolis Star-Tribune, also said the other centers Shirley checked out had been inspected in the last six months and no evidence of fraud was discovered.
Walzâs office said in response to an email from NBC News also confirmed that Quality Learning Center had been shuttered and that the state Department of Human Services has âalready referred these providers to law enforcement, and law enforcement has already conducted raids.â
Shirley, accompanied by a researcher he identifies only as Dave, peppered Somali immigrants and others at the sites they visited with questions and talked to people who said they lived in the area and insisted they have never seen any children at any of the locations.
The Trump administration seized on the fraud scandal this month as it embarked on a crackdown on illegal immigration in Minnesota, which is home to about 80,000 people of Somali descent.
Trump delivered several derogatory rants against Somali immigrants following news reports that dozens of people of Somali descent had been convicted in fraud schemes related to Covid relief that netted over $1 billion.
âI donât want them in our country,â Trump said. âIâll be honest with you, OK. Somebody will say, âOh, thatâs not politically correct.â I donât care. I donât want them in our country. Their country is no good for a reason.â
Walz blasted Trump for âdemonizingâ Somali immigrants.
âIf you commit crimes, you go to jail,â Walz said at an event this month. âDoesnât matter what your race is, what your ethnicity, religion â but demonizing an entire group of people by their race and their ethnicity, a very group of people who contribute to the vitality â economic, cultural â of this state, is something I was hoping weâd never have to see.â
Members of the Trump administration have also called for the resignation of Walz, a Democrat who was former Vice President Kamala Harrisâ running mate in last yearâs presidential election, for allegedly failing to stem the corruption.
Walz was the governor in 2022 when the Justice Department first began charging people in Minnesota with exploiting a federally funded nutrition program for children during the pandemic.
âThis was a brazen scheme of staggering proportions,â Andrew M. Luger, then the U.S. attorney for the District of Minnesota, said when the first federal charges were announced.
California’s AB-5 caused women, ethnic minorities, and people with disabilities to lose their jobs
https://pacificlegal.org/what-was-the-impact-of-ab5-on-californias-marginalized-communities/
What was the impact of AB5 on Californiaâs marginalized communities?
By Alison Somin
March 27, 2025
Instead of giving these workers additional employment benefits, the result is that they are less likely to be hired at all.
The California SAC heard testimony from workers from a diverse array of industries offering their experiences with AB5, including court reporters, translators, cosmetology workers, and exotic dancers. Many of these workers were women, immigrants, people of color, and from other politically disadvantaged groups.
Esther Hermida, a representative of the American Alliance of Professional Translators and Interpreters (AAPTI) testified about AB5âs impact on thousands of citizens in her industry comprised of 75 percent women. One professional translator, Ildiko Santana, reported she started her small business in 2000 as an immigrant and woman of color. She lost all 50 clients and all her income in 2020 when AB5 went into effect.
The SAC heard similar testimony from the trucking industry, which disproportionately employs African Americans and Hispanics. The committee learned that in June 2023, the City of Los Angeles terminated a 132-year-old program called the As-Needed Haul Truck Program. Eighty-seven percent of the drivers were racial and ethnic minorities.
AB5 also appears to have had a detrimental impact on small performing and fine arts organizations. Judith Flex Hella submitted written testimony describing how the concert dance scene, comprised mainly of small companies run by women and minorities, struggles to comply with the law. Gail Gordon founded a small nonprofit opera company in honor of her mother, a Holocaust survivor, that presented music by Jewish composers suppressed by Nazis. In written testimony, Gordon said she is no longer able to put on operas because production costs have increased by about 70 percent, due to AB5.
A 75-year-old woman named Jeanette Marken had her eye gouged out because Seattle refused to lock up a 42-year-old violent serial criminal named Fale Vaigalepa Pea
https://www.youtube.com/watch?v=Z95uGty1kAA
Video shows random attack on 75-year-old woman in downtown Seattle
By Jeremy Harris
December 19, 2025
Seattle – Newly-released videos show the moments a man attacked a woman at random outside the King County Courthouse in downtown Seattle earlier this month.
Fale Vaigalepa Pea, 42, was armed with a wooden board that had a screw through the end of it and used both hands to swing the weapon and strike the victim, 75-year-old Jeanette Marken, in the face, according to charges filed in King County Superior Court.
The hit gouged out Marken’s eye, and she just learned that she will not recover her eyesight in the affected eye, family members told KOMO News on Friday.
“To take a wood club with nails and hit her at full force in the face? I don’t understand it,” said Andrius Dyrikis, the victim’s son.
The video of the incident was recorded by the Seattle Police Real Time Crime Center. It shows a bystander taking a picture of the suspect, and then others begin tending to the wounded Marken. A King County Sheriff’s Office deputy comes running over from the main entrance to the courthouse, and witnesses directed him to the suspect who had walked northbound on Third Avenue.
The deputy detained Pea near the intersection of Third Avenue and Cherry Street and called for assistance from Seattle police.
Suspect was a ‘regular’ for police
Body camera video from the responding officers shows they almost immediately recognized Pea.
âIs that Fale Pea?” a Seattle police officer asks another.
“Yeah, you know him?
“He’s notorious for random assaults on Third,” the officer says.
As paramedics are loading Marken onto a stretcher and treating her injury, an EMT asks an officer about the suspect:
“Who is this guy?”
“He’s a regular. He usually punches. I guess today he decided to escalate from his usual.”
Pea has been well known to law enforcement for years.
In 2011, he stabbed two people at a party in SeaTac. One of the victims was stabbed eight times, according to an arrest report from the incident.
Court records show he was convicted by a jury and received an 18-month sentence of community custody.
Pea continued to rack up assault charges, including one case in 2020, four cases in 2023, and one case in 2024.
According to the King County jail, Fale has been booked eight times this year, though Seattle Municipal Court and King County Superior Court records show none of his arrests this year resulted in charges prior to the assault on Marken. Seattle police have arrested Pea repeatedly this year for charges of assault, indecent exposure, drugs, property destruction, unlawful use of weapons, and malicious mischief.
The King County Prosecuting Attorneys told KOMO News that none of his prior arrest from this year were referred to their office for felony charges. The Seattle City Attorney’s Office, which handles misdemeanor offenses, did not immediately have information on case referrals for Pea.
He is now charged with assault in the first degree and is expected to appear for a competency hearing later this month.
“The defendant’s egregious actions in this case, as well as his prior assaultive criminal history, demonstrate that he is a substantial danger to the community and is likely to commit a violent offense,” prosecutors wrote in charging documents for the assault on Marken.
Victim’s family frustrated by suspect’s criminal past
News that the man accused of attacking his mother was a repeat offender is frustrating for Dyrikis.
“He’s a usual? A usual what?” Dyrikis said. “Attacking people? Civilians? What the hell is wrong with your system?”
Marken was picking up a food order when she was assaulted.
âItâs not her responsibility to know, like, what parts are good, or what parts she shouldnât walk there,” Dyrikissaid.
The area around the King County Courthouse has been problematic for years. The block where the attack happened is home to a homeless facility, and witnesses told police they recognized Pea from the shelter.
Earlier this year, three people were shot during a fight in the intersection. A man was shoved into a door and killed across the street in 2023.
âI want someone to at least say to my mom, âhey, weâre working on this, weâre fixing it,” Dyrikis said. âI want them to say, âwe notice, hey, weâre working on it.â
A GoFundMe for Marken has raised nearly $30,000 to support her recovery.
A brave hero named Ahmed al Ahmed stopped a mass shooter in Australia
https://www.youtube.com/watch?v=JWN_O94-_V0
https://www.bbc.com/news/articles/ce3wkey5p33o
‘He saw the victims and acted’, father tells BBC of ‘hero’ son who tackled Bondi gunman
By Abdelrahman Abutaleb and Emily Atkinson
December 15, 2025
The father of a “hero” bystander who wrested a gun from one of the Bondi Beach attackers has told the BBC his son “saw the victims, the blood, women and children lying on the street, and then acted”.
Video verified by the BBC showed Ahmed al Ahmed, 43, running at the gunman and seizing his weapon, before turning the gun round on him and forcing his retreat. He was shot multiple times and has since undergone surgery for his wounds.
His father told BBC Arabic: “Ahmed was driven by his sentiment, conscience and humanity.”
The fruit shop owner and father of two has been hailed as a hero for intervening in the shooting, which killed 15 people and left dozens injured at an event to celebrate Hanukkah on Sunday.
Police have declared it a terrorist incident targeting the Jewish community.
Mr Ahmed was meeting a friend for coffee in the area when the attack unfolded, his father said.
His son did not hesitate to intervene and “rushed forward, stopped the gunman, and snatched his weapon”.
The family said they felt immense pride in Mr Ahmed, who was now in a stable condition and awaiting further treatment for wounds to his shoulder and hand.
Speaking from Syria, where Mr Ahmed was born and raised, his uncle remarked: “He made us proud – our village, Syria, all Muslims and the entire world.”
New South Wales Premier Chris Minns shared a picture of himself and Mr Ahmed late on Monday and described him as a “real-life hero”.
“His incredible bravery no doubt saved countless lives when he disarmed a terrorist at enormous personal risk,” he wrote on Facebook.
He said it had been an honour to spend time with Mr Ahmed and “to pass on the thanks of people across NSW”.
“There is no doubt that more lives would have been lost if not for Ahmed’s selfless courage.”
Meanwhile, a US billionaire donated A$99,999 (US$ 65,000; ÂŁ49,000) to Mr Ahmed, calling him a “brave hero”.
William Ackman, the CEO of Pershing Square Capital Management, made the top donation to a GoFundMe for Mr Ahmed, which had raised more than $1m by late Monday.
The footage of Mr Ahmed’s intervention was shared widely online.
It shows one of the gunmen standing behind a palm tree near a small pedestrian bridge, aiming and shooting his gun towards a target out of sight.
Mr Ahmed, who was hiding behind a parked car, is seen leaping out at the attacker and tackling him.
He manages to wrest the gun from the attacker, pushes him to the ground and points the gun towards him. The attacker begins to retreat back to the bridge.
Mr Ahmed then lowers the weapon and raises one hand in the air, appearing to show police he was not one of the shooters.
The same attacker is later seen on the bridge picking up another weapon and firing again.
Another gunman also continues firing from the bridge. It is unclear who or what they are aiming at.
Australian Prime Minister Anthony Albanese said on Sunday: “We have seen Australians today run towards danger in order to help others.
“These Australians are heroes, and their bravery has saved lives.”
Speaking at a White House Christmas reception, US President Donald Trump also praised Mr Ahmed, saying he had “great respect” for him.
“It’s been a very, very brave person, actually, who went and attacked frontally one of the shooters, and saved a lot of lives,” he said.
Police say that the two shooters involved were a father and son aged 50 and 24. They have been named by local media as Sajid Akram and son Naveed Akram.
Sajid Akram died at the scene while his son remains in hospital in critical condition.
Eight criminals from Philadelphia made the huge mistake of traveling to Florida. I agree with the Florida sheriff. Heh heh heh.
https://x.com/DanielAlmanPGH/status/1999298475868254611
Eight teens from PA here in Polk to compete in football tournament arrested for felony retail theft at Posner Park
The Polk County Sheriffâs Office has arrested eight teenagers who were caught in the act of conspiring to steal more than $2,000 worth of merchandise from Dickâs Sporting Goods in Posner Plaza, Davenport.
https://www.youtube.com/watch?v=U9sCasgpfOU
On Saturday, December 6, 2025, at approximately 10:55 a.m., PCSO deputies responded to a report of retail theft in progress at the Dickâs Sporting Goods. The store manager contacted PCSO after observing multiple juveniles concealing merchandise. Deputies arrived within minutes and detained all eight suspects, then continued their investigation.
Deputies reviewed surveillance footage and observed the two groups of suspects enter the store separately and then act together to commit theft. The juveniles were identified as Daimon Johnson (15), Mark Bryan (15), Ibn Mahdee Abdul Haqq (14), Elijah Myers (14), Tymir Speller (15), Marcus Hudgens (15), Tymir Smith (14), and Jacob Scott (15). (Per Florida State Statute 119, information about juveniles charged with felonies is public record.)
The eight suspects were formed into two separate groups: Johnson, Bryan, and Abdul-Haqq were inside Dickâs walking around looking at merchandise. The second group â Hudgens, Myers, Speller, Smith, and Scott, then entered the store, and Hudgens made a purchase near the front of the store. He met up with the rest of the suspects in the middle of the store with his Dickâs Sporting Goods bag, and the other suspects proceeded to place merchandise inside of it. Johnson, Bryan, and Abdul-Haqq took the bag, passed all points of sale, and walked out of the store, where they were detained by law enforcement. Abdul-Haqq had stolen merchandise inside of a black backpack, and Bryan had the bag from the store with over $2,000 worth of stolen goods inside. The other five suspects were located and detained inside of the store. Speller had a beanie concealed inside his pants.
Click here to see the video: https://youtu.be/OBDInx1Il9k
The total value of stolen merchandise was confirmed at $2,296.07.
The juvenile suspects were identified as members of a Philadelphia youth football team, the United Thoroughbreds, who were in Polk County participating in the Prolifix Nationals tournament. The teamâs coach, Raekwon Bynes, 29, of Philadelphia, responded to the store and confirmed the teens were staying in Davenport for the championship game scheduled later that day. Parents of the juveniles were notified.
All eight suspects declined to provide statements. None have prior criminal arrest histories, according to the Philadelphia Juvenile Justice Services Center.
The juveniles were transported to the Juvenile Assessment Center and charged with Retail Theft over $750 (F3) and Conspiracy to Commit Retail Theft (F3). Due to their arrests, they were unable to participate in the scheduled championship game.
“These juveniles were not from Polk County, they came here from Philly for a football tournament, and instead of representing their team with pride, they chose to steal – they are Thoroughbred thieves. Let this be clear: it doesnât matter if youâre from here or visiting, if you break the law in Polk County, you will be arrested and held accountable.” â Grady Judd, Sheriff.
Below is the detailed list of the stolen merchandise:
– Nike Menâs Club Fleece Hoodie $49.98
– Carhartt Menâs Knit Rubber Patch Beanie $17.99
– (2) Carhartt Acrylic Watch Hat $19.99
– Under Armour Menâs Unstoppable Fleece Hoodie $110.00
– Nike Womenâs Swift Repel Packable Running Jacket $125.00
– Nike Swoosh Classic Wristband $10.00
– Battle Chrome Skulls Oxygen Lip Guard $24.99
– Shock Doctor Adult Max Airflow Lip Guard $25.99
– (2) Nike Adult Vapor Jet 8.0 Football Gloves $50.00
– Battle Football Turf Tape $24.99
– Oakley Legacy Prizm Clear Football Shield $19.99
– Battle Sports Nightmare 2.0 Oxygen Football Lip Guard $19.99
– (2) Battle Slime Oxygen Football Lip Guard $19.99
– Battle Binky Diamond Oxygen Football Lip Guard $29.99
– Battle Adult Call Your Mom Chrome Football Back Plate $49.99
– Battle Sports Science Adult Chrome Oxygen Lip Guard $19.99
– Shock Doctor Warheads Flavored Max AirFlow Lip Guard $25.99
– Battle Binky Iridescent Oxygen Lip Guard $26.99
– Shock Doctor Max AirFlow Jolly Rancher Flavored Lip Guard $25.99
– Battle Sports Astro Oxygen Football Lip Guard $19.99
– (2) Nike Adult D-Tack 7.0 Football Gloves $70.00
– Jordan Fly Lock 2.0 Football Gloves $60.00
– Carhartt Knit Tonal Beanie $24.99
– Adidas Adult Scorch Destroy Full-Finger Football Gloves $45.00
– Nike Menâs Dri-Fit Essential Cotton Underwear $31.87
– Under Armour Menâs Unstoppable Fleece Hoodie $110.00
– Carhartt Acrylic Watch Hat $19.99
– (2) Nike Menâs Tech Fleece Jogger $115.00
– (2) Carhartt Knit Tonal Beanie $24.99
– Nike Menâs Dri-Fit Unlimited Tapered Joggers $80.00
– (2) Nike Menâs Tech Fleece Full-Zip Windrunner Hoodie $135.00
– Shock Doctor Max AirFlow Jolly Rancher Flavored Lip Guard $25.99
– Battle Sports Doom Speed Football Glove $49.99
– Jordan Menâs Flight Cotton Core Boxer Briefs $31.87
– (2) Nike Swoosh Classic Wristband $10.00
– Nike Swoosh Bicep Bands â 1â $10.00
– Battle Iridescent Oxygen Lip Guard $19.99
– Battle Binky Iridescent Oxygen Lip Guard $26.99
– Nike TF Pro Hyperwarm Handwarmer $38.00
Grand total: $2,296.07
Michael W. Green: “Every dollar you earn climbing from $40,000 to $100,000 triggers benefit losses that exceed your income gains. You are literally poorer for working harder.”
https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie
By Michael W. Green
November 30, 2025
Our entire safety net is designed to catch people at the very bottom, but it sets a trap for anyone trying to climb out. As income rises from $40,000 to $100,000, benefits disappear faster than wages increase.
I call this The Valley of Death.
Letâs look at the transition for a family in New Jersey:
1. The View from $35,000 (The âOfficialâ Poor)
At this income, the family is struggling, but the state provides a floor. They qualify for Medicaid (free healthcare). They receive SNAP (food stamps). They receive heavy childcare subsidies. Their deficits are real, but capped.
Every dollar you earn climbing from $40,000 to $100,000 triggers benefit losses that exceed your income gains. You are literally poorer for working harder.
2. The Cliff at $45,000 (The Healthcare Trap)
The family earns a $10,000 raise. Good news? No. At this level, the parents lose Medicaid eligibility. Suddenly, they must pay premiums and deductibles.
Income Gain: +$10,000
Expense Increase: +$10,567
Net Result: They are poorer than before. The effective tax on this mobility is over 100%.
3. The Cliff at $65,000 (The Childcare Trap)
This is the breaker. The family works harder. They get promoted to $65,000. They are now solidly âWorking Class.â
But at roughly this level, childcare subsidies vanish. They must now pay the full market rate for daycare.
Income Gain: +$20,000 (from $45k)
Expense Increase: +$28,000 (jumping from co-pays to full tuition)
Net Result: Total collapse.
When you run the net-income numbers, a family earning $100,000 is effectively in a worse monthly financial position than a family earning $40,000.
Minnesota has been letting convicted serial rapist Abdimahat Bille Mohamed commit as many rapes as he wants without ever getting sentenced to prison
Serial rapist who dodged prison time now charged with kidnapping, raping woman over several days in Minnesota hotel
By Anthony Blair
December 3, 2025
A serial rapist has been charged with kidnapping and sexually assaulting a woman over several days in a hotel room â just months after being let off with no prison time for two other attacks, including the rape of a 15-year-old girl at gunpoint.
Abdimahat Bille Mohamed, 28, was only free because of the astonishing plea deal he was given in May in progressive Hennepin County, Minnesota, according to court documents seen by Fox 9.
He had first been arrested in September for strangling and raping a woman heâd met on Snapchat â with his DNA then linking him to an earlier horrific attack on a teen at gunpoint.
However, he served no prison time after copping a plea in May that saw his prison sentences stayed.
He has now been accused of holding a woman captive at a Bloomington, Minn., hotel and repeatedly assaulting her in September, just four months after his sweetheart deal, according to the court documents.
Mohamed allegedly met the woman over Snapchat, then took her phone and told her, âYouâre not going home.â
âYouâre not leaving,â he allegedly threatened her, according to the docs.
He allegedly drove her to a hotel in Bloomington, where he raped her over several days â before she was able to jump out of his car and flag down help, according to the docs.
News of his arrest following an earlier sweetheart deal quickly sparked outrage, with Elon Musk raging: âRepeat violent criminals must be imprisoned or they will keep harming innocent people.â
His recent legal woes started in May last year, when he was arrested and charged for raping a woman at his Minneapolis apartment. That woman, whom he also met on Snapchat, said Mohamed strangled her and threatened to shoot her if she did not have sex with him.
His DNA then linked him to the 2017 rape of a teen who said he attacked her after she was first forced at gunpoint to perform oral sex on another man.
He was sentenced to three years in prison for the attack on the 15-year-old, but the sentence was stayed for five years, meaning he served no time in prison.
Mohamed was also sentenced to five years of probation as well as 364 days in the Hennepin County workhouse, but received credit for time served, Fox 9 reported.
He was sentenced to 14 months in prison for the 2024 sexual assault, but that sentence was also stayed, meaning he avoided prison.
Mohamed was sentenced to a further 364 days in the Hennepin County workhouse with credit for time served, and a day of probation.
The Hennepin County Attorneyâs Office justified the sentencing.
âDue to circumstances that cause difficulty in many criminal sexual conduct cases, these charges were the available and appropriate ones to secure a felony conviction,â spokesperson Daniel Borgertpoepping told Fox 9.
Mohamed is being held without bail on the latest charge of rape. He is next due in court on Dec. 31, charging documents show.
New construction makes homes more affordable – even for those who can’t afford the new units
New construction makes homes more affordable – even for those who can’t afford the new units
New market-rate housing can lower housing costs in neighborhoods across a metro area
In cities with tight housing markets, policymakers have struggled to help lower-income residents afford homes. New research shows that just building new housingâeven expensive housingâcan quickly drive down housing costs across metro areas, including in low-income neighborhoods.
Building housing sets off a process called a migration chain, as people leave their homes to move into new units. When people vacate a given type of unit, it loosens the market for that type of unit, which lowers prices. Other people move into the newly vacant homes, leaving their previous units vacant, and the process repeats itself again and again.
In âThe Effect of New Market-Rate Housing Construction on the Low-Income Housing Market,â Evan Mast of the Upjohn Institute looks at the ripple effect of new multi-unit buildings in 12 large U.S. cities. Mast finds that building 100 new market-rate units opens up the equivalent of 70 units in neighborhoods earning below the areaâs median income. In the poorest neighborhoods, it opens up the equivalent of 40 units.
Thatâs far more than the five to 15 affordable units policymakers often require new developments include as a condition of approval, a practice called inclusionary zoning. Faced with such requirements, developers may choose not to build, or to build fewer projects, limiting housing supply and driving up rents.
Although some have speculated that what happens in the luxury housing market has little effect on the lower-income market, Mast used individual address histories to follow 52,000 residents of new market-rate units back to their previous residence and likewise through the migration chain. He found the entire housing market is deeply connected, with people moving between neighborhoods of different income levels.
While only 20 percent of new-building residents moved in from neighborhoods earning below the area median income, that percentage rises for people who move into their now-vacant units, and again for the people who move into those peopleâs old homes.
By the sixth round, 40 percent of residents came from below-median-income neighborhoods. This migration chain continues round after round, creating vacanciesâand lowering costsâfor the lowest-income neighborhoods within two to five years.
The chain can break at any point, however. Families who expand into second homes, or children who leave a parentâs house, for example, donât vacate a unit in the process. Landlords faced with vacancies may sit on empty units instead of lowering rents to fill them.
Most of the time, though, the chain continues to the next round. The longer the chain lasts, the better chance it has to reach lower-income residents. Vacancies typically get filled in 1 to 3 months, and most of the vacancies in below-median-income areas are created by the 15th round.
Of course, the benefits of new housing units donât reach everyone equally. In particularly poor neighborhoods with high vacancy rates, adding vacant housing units might not affect prices much. It might even compound a neighborhoodâs deterioration.
Vacancies also wonât lower rents in areas currently charging the minimum cost of housing, that is, the lowest rent required to keep a habitable unit on the market. Housing people who canât afford this rate requires a different policy solution, such as rent vouchers, public housing, or incentives to landlords to lower prices.
For most middle- and low-income families, however, the research indicates that building more market-rate housing will make homes more affordable throughout a region.
Read the policy brief:
https://research.upjohn.org/up_policybriefs/13/
Read the full paper:
https://research.upjohn.org/up_workingpapers/307/
Published version:
https://www.sciencedirect.com/science/article/abs/pii/S0094119021000656?via%3Dihub
Dan from Squirrel Hill's Blog 