The Displacement Risk Ratio (DRR) is another data tool created by Reinvestment Fund’s Policy Solutions. The DRR visualizes how the ratio of residential sales prices to median incomes changes over time.
Starting at a fixed point in time, the DRR holds median incomes constant in inflation-adjusted, ‘real dollars’, while observing actual home sales prices over time. In this way, the DRR identifies places where long-term residents may have difficulty remaining in their neighborhoods (or where households of similar economic means would be unable to move in) due to increasing home prices.
Because the DRR is based on actual sales transactions, the results can monitor change with more precision than Census tract-based indicators and point to more contemporary market changes. Gentrification is a pressing issue in many cities, and the DRR results can help ground discussions of neighborhood change within the context of prevailing housing costs. These results can help developers identify opportunities to mitigate involuntary displacement associated with rising home prices by preserving affordability in parts of a city that may still be affordable even while residents are likely experiencing pressure from rising home prices.