3. Definition: Filtering Down (Up) is a decline (increase) in real value of a a quality-adjusted unit of housing.

4. 1.) For each Household i, Y i = Real Income 2.) For each Dwelling j, QL j = Quality Measure 3.) For each Dwelling j, V j = Real Value 4.) Housing Market is assumed to be in Equilibrium

5. (A) Limits to Filtering-Up (B) Limits to Filtering-Down

8. Low Income Housing Removal of Slums Supply of Slums

9. (1.) Neighborhood Externalities (2.) Profitability Bias (3.) Social Costs