Boston’s luxury housing boom has some housing activists seeing red, as the Greater Boston area becomes a poster child for gentrification. But if an important new study out of the West Coast is to be believed, that anger is seriously misplaced.

In fact, building market-rate housing – even luxury housing for rich people – actually has the beneficial effect of removing higher earners out of the competition for older apartments and condominiums, finds a report by the research arm of the California Legislature.

The study looked closely at the Bay Area, which, like Greater Boston, has seen housing prices go through the roof amid a toxic combination of soaring demand and anemic levels of new construction.

Low-income neighborhoods that saw the most construction – even of more expensive, market-rate apartments and condos – saw lower levels of “displacement” of long-time residents, or in other words, less gentrification.

“Considerable evidence suggests that construction of market-rate housing reduces housing costs for low-income households and, consequently, helps to mitigate displacement in many cases,” finds the report by California’s Legislative Analyst’s Office.

Low-income Bay Area neighborhoods that saw little new market-rate housing were more than twice as likely to see long-time residents squeezed out as in comparable neighborhoods with lots of new construction, according to the report. Roughly 40 percent of low-income neighborhoods where there was little new construction saw significant gentrification, compared to 15 percent of neighborhoods with lots of building going on.

Apparently construction of subsidized apartments didn’t move the needle one way or another, with the real difference being made by new, market rate housing development, the study noted.

For a low-income or blue-collar neighborhood worried about gentrification, the worst scenario apparently isn’t a developer with plans for new upscale housing. Rather, it’s being wedged against a wealthy neighborhood with little or no new housing being built.

“Another result of too little housing construction,” the California report notes, “is that more affluent households, faced with limited housing choices, may choose to live in neighborhoods and housing units that historically have been occupied by low-income households.”

Scott Van Voorhis

So Many Similarities

The California report puts the blame for the state’s increasingly unaffordable prices on excessive red tape and permitting hassles, which, in turn, have helped prevent developers from building enough housing to meet demand.

It all should sound quite familiar to those in the Boston area, which was named as one of the most rapidly gentrifying cities in the country by a 2013 Fed study.

After decades of underbuilding and NIMBYism run amuck, we are finally starting to see significant new numbers of condos and apartments taking shape, mainly in Boston, but in some suburbs as well.

But right now we are at an awkward and potentially very vulnerable juncture, with a backlash building against new luxury and upscale housing before the cure has had a chance to truly take effect.

We have seen a surge in luxury condo towers downtown. Now a second wave of more expensive, market-rate housing is starting to take shape in long-neglected neighborhoods like East Boston, Roxbury and Dorchester. Neighborhood housing activists are crying foul, pushing for strict new limits on evictions and rent increases that could potentially stymie new residential development.

The Boston City Council is preparing to debate the so-called just-cause eviction proposal on March 14.

There is also mounting pressure for more money to be spent building subsidized units, with Boston officials having upped the requirements on developers. But in the end it’s a numbers game, with only the private market having the ability to build the tens of thousands of new apartments, condos and townhomes needed to get us out of the current mess.

Eventually, supply will catch up with demand and at least level off prices, if not start to bring them down – that is, if we give market forces enough legroom and time to work.

“People somehow get convinced that market forces don’t apply in every situation to housing,” noted Clark Ziegler, head of the Massachusetts Housing Partnership and a veteran housing activist. “Market forces are very powerful in housing.”

That’s certainly the conclusion reached by the research arm of the California Legislature. The nonpartisan group argues the best way for California to tackle its own dire housing crisis is to build its way out.

There simply isn’t enough money to build subsidized apartments for everyone who needs them, the report notes, urging that such efforts be reserved for particularly challenging projects like building housing for the homeless.

That’s a pretty tough prescription and one that many here in the Boston area would have a hard time swallowing, including me.

“While the role of affordable housing programs in helping California’s most disadvantaged residents remains important, we suggest policymakers primarily focus on expanding efforts to encourage private housing development,” urges the report.

Yet the core of that controversial California report is right on: If we want lower condo prices and lower rents, the only way we are going to get them is to build, build, build.