Gentrification presents a quandary for government officials and urban planners concerned about the welfare of low-income families. How can policymakers encourage development in depressed urban neighborhoods without pricing out their residents? The existing strategiesdoing nothing, mandating rent control, subsidizing rental housing, decreasing barriers to building low-cost units, and promoting homeownership by low income familiesare all problematic. By creating a market for rent options or insurance against rising rental costs, policymakers could preserve housing for low-income people while giving them a stake in improving their neighborhoods. Such financial instruments can also insure builders, preserving and increasing development of affordable housing.
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