I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?
A house next door to me sat vacant for 4 years here in Vancouver. The owner couldn't sell at the asking price. The owner never lived in the house himself ever. He couldn't lower the price because then he would be losing money (selling it for less than what he bought it for).
Over that 4 year period, immigration to Canada dropped dramatically.
It just recently sold for slightly lower than the asking price (but slightly more than what the owner had bought it for 4 years prior). It was sold to a new immigrant to Canada. At least the new owner is actually living in it.
Why would developers want to build so much supply that the price drops?
Many of those people have a correct observation in that new construction is just luxury housing, which is obviously unaffordable for people struggling with rent.
What they fail to miss is that for every luxury unit that's built and is occupied, some well-off person moved into it... And out of a shitty, cheap unit that's now on the market.
Almost all new construction is luxury housing; it's what pencils out. The mechanism by which it reduces prices is by reducing demand pressure on older housing stock, which would otherwise be bought up and rehabbed by the same people moving into the "luxury" housing. The constraint that makes this work is increased density: so long as you're adding net units to the market, new construction at any price level will reduce prices in the market.
As someone who grew up in San Diego and now lives in Dubai, I point towards how much of the construction companies in Dubai are partly government owned and were at once fully owned before the government sold shares in their IPOs.
I really don’t understand why the California government doesn’t just build luxury condos at a large scale for profit. The state will get revenue and lower housing costs overall.
Private companies are good at removing inefficiencies. As long as there is competition, private companies will offer better service at lower price. State-owned companies work better in cases where maintaining healthy competition is not possible, or where inefficiencies are not a concern.
In particular, Gulf states have virtually unlimited money, which means that it doesn't matter whether a new construction costs $400k or $800k or what.
It's very rare to find state-owned companies which main goal is to provide service to the citizens and they turn a profit without some form of government subsidies along the way. Let me ask - if you think there is huge market for new construction and it's easy to make profit, why don't you start a construction company?
It's 'easy' if you have inside connections with the planning and zoning committees and utility companies. I recently developed a property worth about $250k for about $100k. The building process itself is relatively cheap (land + cost construction way cheaper than value of a finished property) and straightforward, everything else is not.
The only reason why I was able to get it done as a random person was because I used a non-commercial loophole to not have to get the inspections that are used as hostile clamp on disfavored competition, and the utility companies that could have charged me a gazillion dollars saw that I was just a guy with a family and took pity on my situation (they are used to dealing with large commercial developers) and gave me the easiest out at every opportunity.
If you are a favored developer you can get things done as easily and almost as cheaply as I did and make vast profits. If not you are fucked and you barely break even because either government workers, or government franchised utility monopolies fuck you at every turn. I lost count of how many times I basically saved $20k-$30k because someone decided not to fuck me that day over some inane detail that in the end doesn't actually make any meaningful difference (the only time I got unlucky -- a utility worker made me redo a survey which cost thousands and then LOLed later that I never needed it, eventually it turned out this person was literally just making shit up which is an astonishingly common tactic when some asshole just wants to delay dealing with you. I was only able to fire this utility company because I was on the border between two monopoly lines which created an unusual point of actual competition, and the next one used a ton of creativity to get the same thing done for relatively next to nothing).
Okay so basically the problem is a system of overly complex rules that don't serve any purpose besides cementing the current influence zones. Creating a state-owned company to navigate these rules won't make the whole process cheaper, only changing the rules themselves will.
Why? The level of graft would be breathtaking. No doubt some major builders would get preference for cost plus budgets on inflated numbers. Politicians would steer money to their supporters.
They’d like be building at 1.5 to 2 times what private does.
Because government bureaucrats need to be let in on the take to make it worth their time. Graft is how that gets done. Otherwise they usually just stonewall housing.
Paying $1 to government shills and corrupt capitalists for every $1 spent on actual housing is still a hell of a deal compared to not being able to build anything, which is the status quo in many locked up parcels. A moral standoff and resting on your principles of not funding graft sounds nice, but doesn't accomplish anything.
>Paying $1 to government shills and corrupt capitalists for every $1
And then some forensic accounting happens and a paper is published citing that government built homes cost twice as much as privately built, and the program stops.
It doesn't seem to stop all the other graft-ridden wasteful parts of government.
Personally I despise the idea of public housing, but once something is there, it becomes easier to develop. There has to be some way of enticing all the factions stopping housing with productive greed rather than anti-productive greed. If public built housing gets something where there was nothing until the first paper gets published or whatever, maybe it's worth doing a deal with the devil.
The question is whether the well-off person moved in from the same market, or from elsewhere. (Also, whether they vacate their previous unit or, e.g., keep it as a vacation home.)
None of those are really pertinent because it doesn't change the fact that the well-off person is going to occupy an additional housing unit in this scenario no matter what.
The question is whether it's going to be new construction that they occupy or existing construction. If you're not well-off you'd want that decision to end up with "new construction" so you can move into "existing construction" at a lower rent/mortgage than if new construction didn't exist.
I don't think that is necessarily true. I believe there are, for instance, many reasonably wealthy people who live somewhere outside California and would not move into a dumpy old apartment in LA or SF but might move into a fancy new one. In other words, they will not occupy an additional housing unit (in a given market) unless it is "nice" enough.
I am in favor of building new housing, but I'm even more in favor of reducing wealth inequality. I think we can do both, but we need to be deliberate about it.
> I believe there are, for instance, many reasonably wealthy people who live somewhere outside California and would not move into a dumpy old apartment in LA or SF but might move into a fancy new one. In other words, they will not occupy an additional housing unit (in a given market) unless it is "nice" enough.
That's the point, the "dumpy old apartment" was never going to be the thing stopping the rich person from moving in.
Due to overlap in preferences amongst a multitude of people, the rich person would free up the housing they like by buying it from whoever, who would then free up slightly-less-good housing in the area by kicking out someone else (with money, to be clear) and so on down the chain until you get to the "dumpy old apartment", whose rent now rises because there are more people interested in moving into it due to lack of other options.
New housing, even if it's new 'luxury' housing, breaks this chain of housing migrations in the area before it gets to buying people out of their dumpy old apartments.
Taken to extremes you'll have all wealthy people living in California, and the rest of the country available to us plebs.
The greatest tool we have to reduce wealth inequality is make it so people can buy homes - and the biggest levers we seem to have there are making supply available in general, and making jobs available where there's already supply.
> Taken to extremes you'll have all wealthy people living in California, and the rest of the country available to us plebs.
Which is exactly what people are afraid of happening, and what they mean by the crisis of housing affordability.
You can go and buy or rent a cheap house today in probably 90% of the localities of the USA. Of course, if you already live in those places, you probably don't have the money, because good work is very hard to find.
The problem of housing is that regular people want to live in NYC, and Chicago, and LA, and all of these places, and relatively near to where their jobs are, and they're seeing the rich own more and more of the space that could have allowed them to do so.
"The problem of housing is that regular people want to live in NYC, and Chicago, and LA, and all of these places, and relatively near to where their jobs are"
It's not clear in your phrasing, but it sounds like this is a casual correlation. It's not... Many people only want to live in these cities because it's the ONLY way to get work, given a choice they would quickly move out.
Or, maybe the jobs are there because people companies want to hire want to live there. We have a way of testing this now given that remote work is a thing. We can see if people would rather work remotely from a cheap house in rural Kansas and have nothing to do in the evenings or live in an expensive apartment in an exciting city where their job is.
It is a cycle that always leads to increased population density, and has done so since the dawn of agriculture. People tend to go where there are more people, and then work and entertainment happens where most people are, which attracts more people, and so on. This was as true in Ur as it is in NYC.
>I am in favor of building new housing, but I'm even more in favor of reducing wealth inequality. I think we can do both, but we need to be deliberate about it.
There were two shitty, cheap units. The people in the first were forced to move out when a developer bought it, tore it down, and built the luxury unit. They have been homeless/going into debt renting a third slightly-less-shitty third unit. Without the first shitty, cheap unit, the second's competition was that third slightly-less-shitty unit; they raised their prices commensurately.
The well-off person moved into their nice new unit. The poor person's choice is staying in the unit they can't afford, or spending thousands on moving costs to go to a shittier unit that they also can't afford. Oh, and the city "motivated" the luxury unit's development with tax incentives. A larger percentage of the poor person's check is now going toward paying that back.
This is the reality once you get past simple narratives and reconcile with the fact that building tons of luxury units hasn't actually moved the needle.
The whole point of this article is that building tons of new "luxury" units actually did lower rents, moving the needle exactly as predicted.
The zoning code in the location of your anecdote must be completely suffocating, or that developer would not have left so much money on the table by failing to add more units.
Where I live, a developer recently tore down the cheap, shitty house on the corner and built not one new "luxury" townhouse, but eight of them. Across the street, a larger building was recently demolished, and now they're putting in twenty-one new units. Two cheap homes lost: but a net of twenty-seven homes gained. That represents a whole lot of competitive pressure taken off the lower end of the market.
It's not traditional development lowering rates. Think about the math. You've replaced two cheap homes with twenty seven "luxury" homes. How would that lower the average price? You've weighted the average rate with an order of magnitude more samples on the top half of the range. The only way to see a drop is for there to be a precipitous drop in low-end rates, or a significant increase in low-end, non-traditional development. I think it's the latter, because California has uniquely supportive ADU policy, and implemented it on a timeline that tracks with the rate decreases.
EDIT: Also the end of ZIRP and refinancing finally coming around.
Oh, wouldn't it be funny if lower rates had nothing to do with building volume, and everything to do with landlords having to pull units out of warehousing because their interest rates increased recently?
Thank you. Too many people genuinely believe it is a simple supply and demand problem. Housing is a much more complicated "commodity" than people want to concede.
Where do you see developers buying up units to tear them down and replace them with the same number of units?
When I see properties getting redeveloped it's usually a tiny house getting replaced with an apartment building. Often it's a strip mall or surface parking lot that wasn't housing anyone getting replaced.
I don't think I've ever seen a redevelopment that doesn't significantly increase the amount of living space.
>Where do you see developers buying up units to tear them down and replace them with the same number of units?
DC. And when there are more units afterwards, they're luxury. Building more units doesn't magically lower rates; it has to drive landlords of older units to lower their rates. Did that actually happen? You'd have to prove it. Something else could have, like increased non-traditional competition or the end of ZIRP and refinancing horizons coming to bear.
> What they fail to miss is that for every luxury unit that's built and is occupied, some well-off person moved into it... And out of a shitty, cheap unit that's now on the market.
Ah yes, good old trickle down economics, applied to housing. It's obviously always true that the people moving into a new luxury home are coming from existing lower-luxury homes in the same part of the same city, and will immediately sell or rent those homes off at prices no larger than what they themselves had paid for them and no more.
And we're basing all of this on a tiny decrease in the prices of new rent offers in one of the most expensive in the USA, which built a tiny amount of extra homes recently, not even clear of what type. Clear causation well established.
If demand for cars skyrockets then you (eventually) get more cars at the same price coz the manufacturer can just make more.
If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
So no, supply and demand doesnt really work for land the way it works for everything else.
Land needs to be taxed a lot to create enough supply and in California prop 13 quite deliberately did the precise opposite of that.
Zoning that reduces buildable footprint and/or height artificially increases demand for land. If the only way to build a home is to buy a 9000 sqft lot, then my demand for land is 9000 sqft. If you can build 18 homes on that same lot, my demand for land is 450 sqft.
Land definitely needs to be taxed, but not without the zoning changes first to allow more to be built on less.
Zoning is the hobby horse of property developers. They're endlessly frustrated by the way zoning prevents them from building the most profitable construction - no matter whether there is a good or a bad reason for it (sometimes it's good sometimes it's not).
This inspires a lobbying and public outreach effort to try and convince people that relaxing zoning rules will fix everything.
As with many corporate lobbied for campaigns, it may be a good idea in general (e.g. net neutrality) or it may not be but it's definitely never the panacea it's sold as by the well funded PR campaign.
This is empirically not supported. Relaxing zoning rules works extremely well.
Look at Japan, look at any metropolitan U.S. city that has actually leaned into it. Europe has had mixed use zones for effectively centuries and is not the dystopia that NIMBYs proclaim will appear in the absence of zoning.
It is unpopular because we subsidize the lives and assets of people who “have things” through zoning policy that they make.
Up to a point. Yes, it is nice to mix housing and retail and the like, and some zoning laws prevent this. But you have to look back into the 19th century before zoning laws existed and you had things like slaughterhouses opening in residential neighborhoods. Zoning has good reasons to exist.
Residential and commercial can work pretty well together, up to the point of noise and chemical risks. Industrial will pretty much always need to be zoned because of different hazards it presents.
Correction: zoning had good reasons to exist, but it doesn't anymore. Everything that we used to solve that problem is better solved by environmental laws than it ever was by zoning. It turns out that if you make companies pay for their environmental pollution via noise, chemicals, air pollution, etc., they tend to locate their industrial capacity where it is easier to solve or less impactful.
And while every single reasonable but outdated justification for zoning has slowly disappeared, zoning has been thoroughly co-opted by greedy sociopaths and meddlesome wannabe HOA presidents who want to control their neighbors and police aesthetics and keep out undesirables and inflate the value of their investments.
TFA shows that it was zoning changes that allowed the influx of housing and lower prices. You can find similar articles across the country everywhere that has had significant relaxation of zoning restrictions, like in Minneapolis, Austin, and Seattle (just off the top of my head). This includes places where building code and permitting processes have gotten more arduous while the zoning was relaxed.
I don't care if it is a panacea or not...If you want to convince me that restrictive zoning is not the most significant cause of our housing affordability crisis, you'd have to find some better proof than "developers like upzoning and developers are bad people".
>If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
Yes but people aren't trying to buy land, they are trying to buy housing, which yes, has a foundation on land but also can increase vertically without significantly increasing the land usage.
It does, because factories don’t have unlimited production capacity. See what happened when Covid hit, or when interest rates go down. Used car prices go up with it too.
If the alleged people actually said this, and they wanted to "maintain high prices", then why would they oppose more building? If they believed "supply and demand don't work at all", then more supply wouldn't hurt their goal of maintaining high prices.
A former trustee in the inner-ring suburb in which I live owns and manages rental housing throughout the municipality and is a vocal opponent of building new housing, and of the argument that supply and demand functions in the housing market. I could screenshot him for you, but you have no idea who he is, so: just take my word for it, these aren't "alleged" people. They're a major force in local politics around the country, which is where this fight is primarily being fought.
Leveraged investors in real estate become incredibly "conservative" really fast - not politically but in the "don't ever change anything holy shit I'm on a knife edge" even if the changes would be a net benefit for them.
For the same reason that NIMBYs care so much about urban trees or spotted owls. They don't actually give a shit about them, they just are willing to say or do anything to sabotage the process of increasing housing supply.
I'm as big a YIMBY as you'll find, and urban trees are really important to making a city a nice place to live. There's no contradiction to those positions - just, you know, build more housing and plant more trees. (Spotted owls, of course, have nothing to do with urbanism, so I don't know how they got dragged in here.)
Being a NIMBY I want to live in the neighbourhood I bought a house in, not the one someone who can leave with a months notice feels like turning it into.
Being a homeowner, you get a title to your lot, not your entire neighborhood. You have no legal claim on your neighbor's home. If you want a legal claim on your neighbor's home, join an HOA. Or just buy it.
I'd be willing to bet you every last dollar on the planet that if you read your deed, you will find zero claims to any particular zoning. Zoning is not a transferable property right. It can be changed for any reason at any time.
I’d love to take that bet. My deed (in Texas) states that my lot is subject to the rules of the subdivision which include a number of zoning style restrictions. (They’re called “deed restrictions” and are very common AFAIK.)
The subdivision rules are changeable only with a supermajority vote. I believe the city (Houston in my case) is prohibited by the state from unilaterally changing them.
(I wouldn’t mind more free property rights!!! I find TX “liberty” is often biased towards $$$)
I would gladly see that bet through because that's not zoning, even if its effects are the same as zoning. Subdivision rules are a restrictive covenant (much like how HOAs work). Zoning is not a restrictive covenant, it is by definition a municipally-reserved restriction on land uses, and can be changed at the discretion of the jurisdictional authorities.
I've actually encouraged NIMBYs to use those HOA-style restrictive covenants if they're so adamant on their "zoning" never changing, because a restrictive covenant is actually a volunatory restriction. A city cannot come in and remove them willy nilly (they do in special cases like red-lining, but it is a politically arduous process). Someone with a restrictive covenant by definition has more protection from their neighborhood changing than they would if they just relied on zoning.
The problem is, nobody likes restrictive covenants, and they don't like the HOA-like structures that govern them, and they really don't like the punchable-faced people that seek power in those kinds of organizations.
... with a vote. And subject to the takings clause.
The government can also just take your deed and property, again subject to the takings clause, so long as they pay you back. Or claim someone was slinging crack there or something and not pay you back.
If you're including things subject to the democratic process all the above is on the table.
Also plenty of things written into the deed don't mean shit. It's quite common to read a deed that says something like, in more fluffed terms "no black people allowed." This got baked into lots of deeds back in the day and never got changed because removing covenants to a deed is usually next to impossible. It doesn't mean dick because again the government can simply add or subtract by fiat what your deed actually means.
What your deed is and isn't is a lot closer to how zoning works than you think. Ranchers found this out when their transferrable private property grazing rights tracing back to the very founding era of the USA got usurped by the government and ultimately the BLM who turned around and actually said they're public federal property (which resulted in things like, the Bundy standoff).
If your neighborhood's zoning isn't in your deed, how are you going to claim it was taken from you?
Zoning is a restriction on your rights...when they are lifted, you are gaining more tangible rights, not losing them. If anything, the takings clause should have applied to properties where zoning was introduced...not where it was removed.
It's a beautiful state of affairs when owners of property can collude for their interests with almost no restrictions, but worker unions are almost entirely defanged.
Meanwhile, nobody bats an eye when housing prices inflate $300,000 because existing homeowners are doing their fucking hardest to make sure that no new homes get built.
And then a decade of that later, all the people bitching about immigration will be wondering why the country's demographics resemble that of a nursing home, and why the tax base and the social safety net has collapsed.
Hospital wait times in Canada, Australia and the UK are _years_ for elective procedures. I had a health scare three years ago and got put on the public waiting list. I still get a message every 6 months to remind me that I'm on the waiting list.
I've still to advance far enough up the queue to get a date booked.
It can always collapse more. Ask anyone who lived through an actual economic collapse. (As opposed to the kinds of minor corrections that the West has seen over the past few decades.)
Your imagination is very limited if you can't think of what the long-term consequence for a country with an average age of 41.6, a fertility rate of 1.25, and a huge political block of nativists who can't do basic arithmetic, are asking for something incredibly stupid, are getting exactly what they want, good and hard.
You solve a housing shortage by... Building more housing. Not by driving young people who want to do work out of your community.
Destroy your society today so it doesn't get potentially destroyed in 30 years is certainly a take.
>You solve a housing shortage by... Building more housing.
It's not housing. It's roads. Hospitals. Schools. Sewers. Power lines. Everything needs to be rebuilt. That means that the immigrants who are coming in must be engineers, doctors, teachers, tradies. Instead we get uber drivers and IT consultants. There aren't enough qualified people in the world to keep up with current immigration to the west. The only solution is to lower immigration until the ratio of qualified people coming in matches (or hopefully exceeds) the ratio of qualified people already here. Anything else lowers living standards and makes a right wing reaction inevitable.
> Destroy your society today so it doesn't get potentially destroyed in 30 years is certainly a take.
Immigrants coming in today aren't 'destroying society'.
And it's not 'potentially'. It's certainly. Nativists have no answers to it, and if they actually presented the dilemma of 'We can keep Pablo out, and also anyone currently under the age of 40 will have to work until they are 75', not a single person would give their ideas a moment of thought.
> It's roads. Hospitals. Schools. Sewers. Power lines. Everything needs to be rebuilt.
Why does it need to be rebuilt on anything beyond a regular depreciation schedule in a steady-population situation?
And by the way - Canada needs to invite at least half a million people a year in order to maintain the population at a steady-state. That number is the table stakes.
>And by the way - Canada needs to invite at least half a million people a year in order to maintain the population at a steady-state. That number is the table stakes.
In 2025 total deaths in Canada were 334,699, totals births were 368,928.
> In 2025 total deaths in Canada were 334,699, totals births were 368,928.
If you think that's not a problem, stop cherrypicking numbers, and look at Canada's population pyramid. And then tell me what will happen as the big fat middle, that starts at 25... ages out of work. Do you think that little sliver of 0-24s are going to be holding everyone else up?
Those are the numbers you need to be looking at. Oh, and emigration isn't zero, but someone leaving the country isn't counted as a death on the census. 120,000 people emigrated in 2025.
In that case we aren't in a steady state population case and we need to build schools, hospitals, public transport, water, power etc.
Which means that we need stop importing low skill labor in the IT and services industry and move to high skill labor.
The developing world unfortunately doesn't produce enough for the current immigration levels in the west. Ergo we must lower immigration until the ratio of high skill migrants is equal or higher than that of the native population.
I think this us a fair feeling. One chooses a house based in part on the area as the specifics of the house itself. Wanting the neighborhood to remain unchanged is a reasonable desire.
Unfortunately, as much as you desire it, it's not something you can control. Neighborhoods change all the time. That good school you moved to be close to can decline, people with the wrong politics can move in next door, the convenient mall may close.
Yes, local politics gives you a vote. But of course we all get the same vote, homeowners and wannabe homeowners.
So, I think your want is valid, alas though you have no rights to your neighborhood and so your want is just what you want.
Of course you should stand up for your wants. But wants are not rights. So it's equal to everyone else's wants.
I'm upvoting you because your desire is not invalid. However, and I don't mean this perjorativly, your wants don't legally count for much. Just as much as any other person.
Part of the problem (or the solution depending on what side you stand on) is that only residents get a say, and often you find that the renters become just as nimby as the owners, especially if rent controls or other advantages are in place.
And those outside have a very hard time voting where they want to live but don't.
(The old solution was to make a new city that was like you wanted, with blackjack and hookers, hell forget the city we'll just build the strip!)
If demand picks up because supply increases, you will reach the previous equilibrium even with more supply. It isn’t rocket science, there is a price people are willing to pay to live in SD, and the market will keep gravitating to that price unless demand is somehow limited. The price people are willing to pay can even increase as density makes brings in things (eg culture, job opportunities) that make the city more desirable (eg see Hong Kong).
At the levels of density seen in Paris, San Diego could house 16 million people. That's city proper. The metro area could house 226 million people.
You're gonna have to do a lot better job convincing me that 16 million people would move to San Diego if they just built more housing. Let alone 226 million.
Twist do you think happens to every city that has reached 16 million people? Did they become more popular or less? Given that I’ve lived in a city of that size, my answer will differ from yours (they become more expensive, not less).
I’m confused on why you think paris is affordable and San Diego metro could somehow have enough water to grow to 220 million. The nearest comparison I can think of is south China Bay Area population (87 million), and if you think that those cities are affordable…I’m guessing we really have to agree to disagree.
> Twist do you think happens to every city that has reached 16 million people?
It's not about the exact number, it's that one city is not going to 10x in population from getting the price of housing down to "still a city but not skyrocketing".
> I’m confused on why you think paris is affordable
Compared to San Diego, it does seem to be significantly more affordable, and mainly because of rent.
> and San Diego metro could somehow have enough water
The most expensive source of water, desalination, should be under $1 per day per person. And there's probably better options.
> to grow to 220 million.
That number is a silly number to explain density, not a proposal.
> and if you think that those cities are affordable…
No, the only comparison point was Paris, and the density of Paris.
There is no way for San Diego to grow that fast overnight anyways. If it grows gradually, and it’s still desirable, that will attract more jobs and more people eventually, the city won’t become more affordable (long term) until it stops attracting new residents. Otherwise, new housing simply provides temporary relief while the city grows.
Paris is a good example, I think, of a city expensive by French standards. My point was that if your theory is you can build to affordable, there should be at least one example on the planet where that actually worked (even Tokyo is considered expensive by Japanese standards).
> the city won’t become more affordable (long term) until it stops attracting new residents
I really hope we don't have indefinite large amounts of US population growth. And if we mostly stabilize the population, then it only takes a few 16M cities to absorb all the demand and make the relief permanent.
> Paris is a good example, I think, of a city expensive by French standards. My point was that if your theory is you can build to affordable, there should be at least one example on the planet where that actually worked (even Tokyo is considered expensive by Japanese standards).
Then consider this particular argument not that you can build to a nebulously defined "affordable", but that you can build to "San Diego has between 100% and 1000% of its current population with rent 40% lower than it is right now".
San Diego would be a very popular city at lower prices, but simply put there isn't enough population in the US to even think that demand could grow anywhere close to those levels. It would take a 50 year long gold rush, draining of other American cities, etc. The fastest growing city in modern history, Shenzen, grew 6000% in 30 years, and it could only do so because China simultaneously had the highest population growth in the world and the highest urbanization rate in the world.
At some point, demand is saturated, and it takes an extremely delusional belief that demand can perpetually grow so that prices never drop. We have proof in the article that prices can drop with even moderately fast construction rates. Keep going.
Yet the rent in Paris is still too high for an average French resident; and while rent is lower than in San Diego, the price of an apartment is higher. And, of course, median salary in San Diego is far higher than in Paris.
>Yet the rent in Paris is still too high for an average French resident
It's obviously not just about more housing, but more housing per capita.
3% of the French population lives in Paris proper, and roughly 20% in the metropolitan area compared with 0.42% in San Diego and ~1% in San Diego MSA [1].
More hosing will help Paris along with San Diego to put downward pressure on prices.
Water is the primary limiter on city population sizes in the west. I wouldn’t be surprised if San Diego wasn’t at its limit already with respect to water resources, but I haven’t looked into it. Desalination could improve that.
If we could have Chinese work crews come in and build housing, especially 30 story concrete towers that are popular in Asia, we could build fairly cheaply, that isn’t really the limitation (it’s easier to solve than getting water to those new units for expanded population).
Weird title for a paper that argues that "Government intervention is critical to ensure that supply is added at prices affordable to a range of incomes". I would personally classify that position as "supply skepticism".
Short term. Long term the market will change to equilibrium. If you are buying, just lock in lower housing prices now. If you are renting without rent control, you get one or two years of reasonable rates and then it will go nuts again.
Buffalo has 50% as much housing now as it did at its peak, since demand dropped and housing was just razed rather than maintained. There are lots and lots of cities in the USA that aren’t San Diego, LA, SF, Portland, Seattle, NYC, Boston, … and they have plenty of supply that there is no demand for. You can buy a house for cheap in Toledo. For some reason, people would rather pay $3000/month to live in San Diego than $700/month to live in Buffalo or Toledo. It shouldn’t be a mystery why.
I lived in Beijing for 9 years so I get a different perspective. But ya, the market for people who want to live in Beijing rather than Chengde or Langfang is surprisingly vast, and Beijing has a resident system to prevent at will migrations.
God most of the "discussion" around housing is such copium by obviously-biased people trying to convince everyone that we shouldn't have access to high quality housing. Yes, in the year 2026, despite all of humanity's achievements, it's of course IMPOSSIBLE to configure any type of society such that housing is decent and fair for all. IMPOSSIBLE, did you hear? Nope, it just won't work. Whatever your reason, you're wrong, society is perfect already and we cannot improve.
And the reasons people try to give... Just hilarious to evaluate from a high level. Oh, no we can't have good housing because supply and demand has determined what we have is optimal. Oh actually even if you did adjust supply and demand, it wouldn't fix the issue anyway, so don't try anything. Ah no you can't have more houses because then how will people commute?! Unsolvable! There aren't enough houses in a reasonable distance from urban centres? God well how about you just build a house in the outback where the supermarket is 200km away then! No we can't have more houses because then it will attract <demographic I don't like>. But think of the children - how will they survive without a 10 acre backyard to play in??
It's so disgustingly painfully obvious to any reasonable person that we have no reason to have a housing crisis other than certain people collecting those fat stacks of cash, sweet cash.
You say this like it is such a obvious problem to solve, and from a naive point of view, maybe so.
But each of the reasons why things the way they are isn't just stupidity. It's backed by people's preferences for living. EVERYONE is extremely opinionated on housing because it affects us the most (air/food/water/shelter...) . We all have something to say about where we live or have lived and the pros/cons.
Unfortunately, housing is not merely treated as a cost issue for most people. Where we live is a social and even spiritual experience. We're not bugs that mindlessly perform our economic duty and then return to our hole. We're human beings who like space, freedom, and the ability to control our surroundings.
A lot of people have vested interest in keeping the housing pricing high. That’s also pretty much why zoning and other regulations never get updated to match the demand.
I see the "supply and demand" straw man is propped up well and often in this thread. Let's talk about the actual dynamics in play:
1) Rent-Fixing: This is widespread across the country and the actual reason why inventory increases often (commonly) do not lower prices. There are multiple tactics landlords have used to ratchet up rates without ever letting them drop. These include lease concessions that don't affect the base rent in lieu of rate drops in step with lowered demand, warehousing that artificially limits accessible supply even when new, physical units are hitting the market, and algorithmic price-fixing had allowed landlords within a region to stay in lock step without breaking rank lower. When landlords are able to use such tactics with impunity, they absolutely do warp supply-demand dynamics and allow rent rates to stay high even in the face of expanding actual inventory. For rents to decline, you have to break large landlords' ability to set their price.
2) Builder Subsidies: "Just build more and prices will drop," ignores that the incentive structures municipalities use to draw developers are an additional burden on residents. These for-profit corporations then seek to make a profit on their investment, leading to no direct meaningful inventory increase in the affordable unit range. Worse, developers often target existing affordable units for their redevelopment, destroying the very units that the new inventory is supposed to ultimately reduce demand for. In order for "build more" to drive down rents, it can't be done the way it has been, which mostly ends up being a giveaway to developers at the expense of the tax base and displaced renters.
San Diego is a special case where it seems that the expanding inventory has been driven not by corporate developers, but by the construction of ADUs, which are built by homeowners out-of-pocket, are not tax-subsidized and, in fact, increase the taxable value of property. In this way, they work almost counter to traditional development, and these factors combine with their being created and operated outside of the control of corporate landlords means that they represent new and meaningful competition to those landlords. Thus, efficiencies are sought and prices drop.
Encourage ADUs. Avoid subsidizing large developers and corporate landlords. If there is the political will, get the government directly involved in constructing subsidized owner-occupied, human-scale housing, as in Singapore and the pre-Thatcher UK. Relax zoning and build out public transit and car-free infrastructure in order to reduce the accessibility premium, as in Japan. That is how "build more" actually can work to lower rates.
Well, that will work in a 1M people city, but in larger ones you also have to fix transit.
Another impossible problem, that nobody has ever been able to discover the solution is to build mass transit. Maybe one day people will manage to solve it.
Can't tell if serious... like The Onion article suggesting that "there's no solution to reducing gun violence, says nation with unique access to guns".
There is abundance of housing. It's just that people want to live in big metro areas that have extreme concentration of economic opportunity and amenities.
I don't understand how transforming every urban area into Kowloon Walled City will solve that unless your plan is to make it so dense that people will finally find it undesirable to live there?
At the density of Kowloon Walled City, the entire population of India could fit within the city limits of San Diego. Nobody is asking for that, silly.
We could 1.5x the density of San Diego and still have the livability of Copenhagen. We could 3x the density of San Diego and still have the livability of Vienna. We could 5x the density and still have the livability of Paris. 8x and still have the livability of Tokyo. We have a ridiculously low bar to pass, all we have to do is allow it.
Paris [1] and Copenhagen [2] have similar housing issues. Both are some of the most expensive cities in Europe [3]. Vienna has a large municipally owned and non-profit housing stock [4]. The situation in Tokyo was okay while it was growing its stock like crazy, it is facing an intensifying affordability crisis right now [5]. If there is a bliss point at which the housing crisis is solved with density before Kowloon Walled City levels, it surely not at Tokyo levels. What do you think that bliss point is? Why do you think it is a better solution to grow city densities to those levels rather than trying to make it easier to live and work in compact, mid-rise 15-minute cities that people generally seem to prefer? [6]
Housing price is a function of supply and demand and your argument had nothing to do with price of housing, you were only talking about density and its effect on livability. And it's very clear that people value living in cities that are much denser than San Diego. If people genuinely do not want a denser San Diego, there wouldn't be any point to restricting that growth.
I personally would love to live in a city like Tokyo. People have different preferences. Don't force your preferences on me. If people "generally prefer" midrise cities, they will move there. There's a reason why so many people live in Tokyo when there are plenty of less dense cities in Japan. The great thing about allowing density is that people will stop moving in when they don't like it anymore.
> Housing price is a function of supply and demand
Yes, a function of supply and demand of everything. [1]
> your argument had nothing to do with price of housing, you were only talking about density and its effect on livability
My argument is that there is no reason to assume that increasing supply by blanket deregulation is a simple and effective solution to the housing crisis that has no downsides.
> If people "generally prefer" midrise cities, they will move there.
Many people don't want to move there because there are not enough economic opportunities, not because they dislike good traffic or green spaces.
> The great thing about allowing density is that people will stop moving in when they don't like it anymore.
If you solve all possible tragedies of the commons of that approach, sure.
I think both dense and not dense areas suffer from tragedy of the commons. The only difference is in the suburbs the effect is spread out, so you can kind of pretend it doesn't exist. Which also means that each individual person has the potential to cause more damage.
That's the issue. Most Americans don't want the entire population of India to be in San Diego. To some of us, San Diego is one of the best areas in the country. Why destroy it?
Housing is the single biggest variable in any retirement calculation, and it's the one people get wrong most often.
I build FIRE calculators, and the difference between "retire at 55" and "retire at 65" is almost always housing. A $2K/month difference in housing costs (say, HCOL city vs. LCOL area) means you need ~$600K more in your retirement portfolio at a 4% withdrawal rate. That's 5-8 extra years of saving for most people.
The math is cold: if your annual spending drops by $24K, your FIRE number drops by $600K ($24K / 0.04). Building more housing supply doesn't just help renters — it directly shortens the timeline to financial independence for anyone planning their retirement around current rent prices.
Quite the opposite: retirees will flee to low cost of living areas, taking the money that they spend in other sectors (food, health, entertainment, etc.) elsewhere.
> San Francisco led the nation in annual rent growth this month, with both one and two-bedroom prices hitting new all-time highs, marking the highest levels in over a decade of Zumper data. One-bedroom rent climbed 18.4% to $3,790, surpassing its previous peak of $3,720 set in June 2019, while two-bedrooms rose 22.6% to $5,270, exceeding the prior high of $5,120 recorded in September 2025.
From the Zumper report. 22% gain on SF 2B is just insane to me.
SF (only acceptable abbreviation) is 7x7 miles square surrounded by water on three sides—the only way to grow is up, right after you knock down the 100 yro Victorian homes and historic buildings, and gut the neighborhood charms. This from someone who once paid rent 1300/mo for a two bedroom in Potrero Hill.
>right after you knock down the 100 yro Victorian homes and historic buildings
BS, there's ~400K housing units in SF, and only ~10k of those would be considered victorian. These units couldn't (And shouldn't!) be destroyed for new housing because they're protected, and that's not what NIMBY's or YIMBY's are arguing about anyway since almost everyone loves victorian homes.
More than half of the city's housing was built after 1940, mostly on the west side, and it's where NIMBYism is at its worst. There's little reason someone or even a developer shouldn't be able to build up there.
hehe. Frisco seems derisive to me. And The City? All major cities can be called that when in their vicinity (NYC?). But SF? It's right there on the Giant's caps!
I’m gonna also say this is because biotech is in decline and major employers are pulling out. People straight up can’t afford to live there on their own.
I agree, comparing to other expensive markets seems a bit odd, rather than comparing to markets with some other similarity (population, geography, median income, et cetera). The full table in the original report is much more interesting:
SF rents have gone up, that didn't decrease demand. Why did SD rents drop, not because people left because it was too expensive, that doesn't make sense.
This suggests that San Diego has been getting more desirable over time (denser, more jobs, more culture, etc). The people who'd been around for some time that could hack the old SD rents couldn't deal with those rising costs and had been spilling over to Temecula, Phoenix, etc.
The majority of the "more housing = cheaper rent" success stories crowed about on the internet correspond with net population exodus. Austin, Minneapolis, now San Diego.
Edit: I think we should build several million more units of housing in the US. I'm salty because all the new housing I've seen is ugly shitboxes owned by national property firms that make everywhere feel like nowhere.
Right. What the reporter calls a "surge in supply" is an increase in "active listings", which doesn't differentiate from listings due to new construction vs listings due to people leaving.
Also, I could not find the "active listings" data in Zumper's report[1]. And then I noticed the chart with the active listing data says it was made by Brenden Tuccinardi/KPBS, so this was done by a reporter, not a Zumper data analyst. It's a bit fishy.
San Diego also has the strange property of being on an international border!
TJ and SD are really two parts of the same metropolis - any investigation has to see how population ebbs and flows across that border, and what the housing prices did on both sides.
I suspect lower demand was more likely (although more supply never hurts).
San Diego has a ton of contractors dependent upon the federal government. I imagine the shenanigans of the current administration caused a bunch of them to pack it in and leave town.
> San Diego sits at the 11th most expensive rental market in the nation, according to the report, with the median rent for a 1-bedroom at $2,200. Median rent for 2-bedroom apartments is $2,950.
For expensive high growth markets, rents have dropped in most. Part of this is from a freezing of the labor market meaning nobody is really moving to town.
That part is the obvious part. I want to know how they got all the entrenched landowners to let new builds in their neighborhoods and drive down values. The NIMBYs are usually the problem.
Tons of San Diego houses have a ton of land thanks to the mid-20th century lawn fetish back when everyone was pretending that there was enough water so there are a lot of places where someone can turn some dead grass into as many as 5 ADUs.
If you are an owner of rental houses, I would think that it's in your interest to be able to build ADUs on those properties. Even if everyone does it and prices go down a bit you're still making a lot more per property than you were before, assuming reasonable building costs (and if building costs are not reasonable then not many owners will be building ADUs and prices won't go down).
Well, once you loosen up building codes to allow apartment buildings instead of single family homes then suddenly the developers will come with a lot of cash to buy those homes from NIMBYs. And cash is always convincing.
Unfortunately, it's not actually obvious. There are heaps of people, even and especially in the most expensive housing markets in the US, who will outright argue that supply and demand doesn't apply to housing.
Yeah it seems like there is a widely held belief that people are freeloaders looking for any opportunity to take something they perceive to be free, so they go do things they would not otherwise do. A much simpler explanation is that when the cost is low they do what they wanted/needed to do, and when the cost pushes the ROI too low they do without something, or find a workaround. The demand is still there, just unmet.
The problem with roads is that cars are really really inefficient and drivers don't have to pay for the road, so a driver can extract government subsidies by driving more.
You run into the same problem with free or heavily subsidized public transit. The trains were crowded in Germany when the government instated a temporary 9€ ticket for all public transit (buses, subway, tram, regional trains, etc) in all cities.
It is more complicated than that, for sure. I definitely pay for the roads in my city. And I pay for the mass transit in my city despite almost never using it.
It does not seem controversial that if you raise the cost for something, less people will make that choice. That does not mean that the underlying demand actually did not exist to begin with. If you made the cost zero, you would find the real demand.
Maybe renters were such a crazy high percent that despite the fact they were all wrapped up in their jobs and children vs retirees with nothing else to do in their $1M house than show up to meeting to influence the political apparatus they they still finally balanced out at the planning and zoning meetings.
California also passed a ton of laws that effectively upzoned the state in various ways. Minnesota did the same thing a few years back.
This seems like the only real path - you cannot beat out these skeezy local homeowners and landlords at the corrupt local politics game. You need statewide politicians who have political ambitions to build off of solving these problems.
plenty of renters ask for rent control instead of increasing supply. Often they make the mistake of seeing high prices for new apartments and mistakenly believe those high prices mean the rent is going up over all.
A mainstream view on one side of the political spectrum that increase in new home supply(especially if high end) does not lower prices or reduce shortage.
> One well-worn refrain of progressive urban politics is that new, “luxury” housing will not help solve the housing shortage. A 2024 study of U.S. voters found that 30 to 40 percent believed more housing would, instead, increase prices, and another 30 percent believed it would have no effect
That's because "progressive" urban politics is generally not progressive at all and dominated by the upper middle those that benefit or think they benefits from squeezing the working class out of their neighborhoods.
Those people aren’t progressives: they’re NIMBYs who learned that certain language can make it easier to get the policies they want. We have a ton of them here in DC, and you can tell by seeing what else they support: they’ll talk about affordability to block luxury apartments, flip to pretending to be staunch environmentalists to block an affordable housing project, talk about traffic or “the poor” when protesting a bike lane before pivoting to block transit projects, etc. It seems incoherent until you look at it through the lens of whether something would add competition to their future home sale or cause the city to subsidize them driving every everywhere less.
They are progressive (Statistically)... it's just that they are human too. Meaning they can have progressive ideology and vote for weed, pronouns, but when you touch the wallet, not so much.
You raise a fair point but I think you can draw a line between people who actually do progressive things in other areas and those who sometimes use the language but never show up for anything other than preserving the status quo.
Well, building luxury housing still helps, to some degree: the richest residents of the area would buy it, and they would sell their old house to someone slightly less rich, who in turn would sell their old house… At the end of this chain you get affordable housing.
Affordable housing has always been old housing. Housing is essentially a pigeon hole problem, where some pigeon holes are nice and fancy and some are older. The pigeons simply bid their way in, and the more extra holes the cheaper they are.
I think the steelman argument is that maybe you induce demand and it's a wash on housing costs as rich people move into the city or etc to use the new condos
There is at least some truth to induced demand with new housing driving an influx of new residents, especially in cities with economic opportunity.
Just like transportation induced demand, the solution is different style of infrastructure. High capacity metros, bus lanes, and regional rail to get people out of cars and use limited transportation corridors more efficiently than single occupancy vehicles. One more lane bro doesn’t work, but adding new forms of more efficient transportation does.
New, denser housing with mid rise and high rise buildings and a mixture of unit sizes in walkable neighbourhoods with good transit access absorbs new residents and drives down housing costs for everyone. Single family sprawl doesn’t work, but density can.
We have under-built for decades, so it’s easy to misunderstand the signals. More housing gets built and prices still go up, and many people are concluding more housing just increases prices, leading to people with good intentions decrying “luxury housing”. There are plenty of nimby actors in the mix too, tossing in all sorts of misinformation and bad faith arguments, muddying the water.
The reality is areas with strong economic growth are all failing to add enough new housing and demand continues to outstrip supply, leading to higher prices. Many studies have shown even new high end housing helps manage prices, as someone rich enough upgrades, leaving their unit empty for someone else to upgrade into. That chain continues all the way down into the lower cost units, each time freeing up space someone else can afford. Large migration into a region can mess with how much prices can be affected, but studies still show even high priced new units do slow down growth in prices. Supply and demand does apply, we have just massively underestimated how far behind supply is for the demand and need to add so much more housing.
Well, that would mean the rich people moving in aren't hogging or bidding up existing housing stock in the city, and the cities they moved out of will have the same price lowering effect that the GP mentioned.
Yet SoCal suburbs are full of them. And it doesn't necessarily add supply, since most people seek leases longer than the maximum 90 days set by Airbnb. Unused short-term rentals offer significant tax writeoffs. The owners don't need demand, they just need the plot's assessed value to continue increasing.
It's surreal that orange site seriously thinks rich people would ever liquidate the most inflationary asset in the West.
According to google results there's around 10k airbnb listings in san diego, around 1% of households or maybe "less than 2%" by one article.
Even if 30% of new houses ended up causing a bad use like airbnb, all the rest would be still be significantly improving the situation. And you would not be able to balloon the airbnb supply for long until the price drops and a lot of those houses switch to normal rental.
And that's still playing into the "nobody sells a house" situation. Many people would sell houses.
Losing money sucks even if you don't pay taxes on it. But what kind of writeoffs in particular?
> The owners don't need demand, they just need the plot's assessed value to continue increasing.
Which it would not be doing in a situation with significant building. A self-reinforcing supply constriction going to airbnb can't absorb that many houses. I don't think it would survive a doubling in the number of airbnb listings.
And even if the value keeps rising, not having renters loses you a lot of money. Many of those empty houses are going to turn into long-term housing.
> It's surreal that orange site seriously thinks rich people would ever liquidate the most inflationary asset in the West.
There's a lot of people in 5 million (or 4,3,2,1 million) dollar houses that cannot afford a second one.
You can make $100-200k in 'easy' profit where I live by dropping the cheapest manufactured home on a plot. If you live in a place that allows it, I don't understand why people don't do it. I literally got a ~270k house for under $100k by being willing to be the guy the develops the plot. The actual house was laughably cheap, like 60k, there is a burnt out house dressed up in new paint selling next to me for like $300,000 and someone will snatch it up shortly.
Except when it doesn't. From the same article, Seattle and Oakland had supply increase 13% and 6% respectively and both saw average rents go up. Long Beach, CA and Santa Ana, CA both had supply increase by over 10% and saw rents stay basically flat.
More supply generally will help, but it's not a silver bullet.
Maybe more recently it's up but Oakland has been a supply success story as prices diverged with SF starting around 2021. There's a chart past the fold that illustrates it well:
Let's be clear about our terms here. The articles in the OP appear to be strictly discussing the City of San Diego. The City of San Diego is a drop in the bucket compared to the expansive San Diego County. If you're talking about being a "border town" or "metropolis" then you're not talking about the City but the County.
San Diego County includes La Jolla and points further north, as well as El Cajon and Jamul and all sorts of suburbs. It's a huge area with many disparate neighborhoods (and even 4 microclimates.)
The City of San Diego includes very undesirable neighborhoods such as most of Downtown. There are a lot of places where normal people would have a terrible time, despite still being expensive. But there are also many different parts of the County which are "bad neighborhoods" and upscale places and ethnic enclaves, etc.
Honestly, I was a little surprised that these articles are specifically referring to only the City in terms of housing supply. The vast majority of San Diegans don't even live in the city. I mean, it's not as pathological as Los Angeles and its county, but it's an important distinction that's often lost on out-of-towners.
I do wonder how much of this can be attributed to many people leaving biotech for better paying jobs in the AI gold rush (a.k.a packing it up and moving to SF).
So the source for this (which is stated and linked in the article) is something called the Zumper National Rent Report [1]. For anyone curious, this is their methodology [2]. This seems to be a measure of active listings based on advertised prices. So it's not necessarily an indicator of if those listings close and at what price (eg in hot markets, people can offer above the listed price). But it seems reasonably well-regarded.
I'm not sure where the "19 of 20" comes from because I grabbed the data from the report into a Google Sheet and sorted and it's not #19 by 1br Y/Y, 2br Y/Y or average rent. What it shows is 1br -5.6% and 2br -7.5% Y/Y. LA was -3.6%/-2.5%.
It's hard to find a comparable city to this because there aren't actually a lot of coastal cities in the US that aren't mega-cities (eg Boston, New York, Miami, Houston).
It seems like San Diego built ~4000 new housing units in 2025 with a population of ~1.4M. For comparison, Miami seems to have added ~18,000 but it's population also exceeds 6M so is that a fair comparison?
My point here is that the direct evidence linking building new housing units to changes in rent is weak.
Not that I'm opposed to building by any means but simply blindly building more units is by itself not an answer. It depends on what you build, where you build it and whether you allow effective or actual cartels to monopolize that supply.
Take Manhattan as an extreme example. There has been a ton of building along so-called Billionaire's Row and also some pockets in the Financial District, West Chelsea, the UES and so on. A lot of this stock is the so-called ultra-luxury market. Prices for some of these new units are now exceeding $7000/sq ft.
That is going to help absolutely nobody. Ultra-wealthy non-residents will park money there and that's it. This blind assumption that it will eventually become prole housing is ludicrous.
Housing should primarily be for shelter, not a speculative asset or investment vehicle to get wealthy by denying someone else shelter.
Like magic, you will find that post-inflation home value growth was low in the metros that built the most: Austin , Raleigh-Cary, Nashville, Jacksonville, Houston.
I see the "supply and demand" straw man is propped up well and often in this thread. Let's talk about the actual dynamics in play:
1) Rent-Fixing: This is widespread across the country and the actual reason why inventory increases often (commonly) do not lower prices. There are multiple tactics landlords have used to ratchet up rates without ever letting them drop. These include lease concessions that don't affect the base rent in lieu of rate drops in step with lowered demand, warehousing that artificially limits accessible supply even when new, physical units are hitting the market, and algorithmic price-fixing had allowed landlords within a region to stay in lock step without breaking rank lower. When landlords are able to use such tactics with impunity, they absolutely do warp supply-demand dynamics and allow rent rates to stay high even in the face of expanding actual inventory. For rents to decline, you have to break large landlords' ability to set their price.
2) Builder Subsidies: "Just build more and prices will drop," ignores that the incentive structures municipalities use to draw developers are an additional burden on residents. These for-profit corporations then seek to make a profit on their investment, leading to no direct meaningful inventory increase in the affordable unit range. Worse, developers often target existing affordable units for their redevelopment, destroying the very units that the new inventory is supposed to ultimately reduce demand for. In order for "build more" to drive down rents, it can't be done the way it has been, which mostly ends up being a giveaway to developers at the expense of the tax base and displaced renters.
San Diego is a special case where it seems that the expanding inventory has been driven not by corporate developers, but by the construction of ADUs, which are built by homeowners out-of-pocket, are not tax-subsidized and, in fact, increase the taxable value of property. In this way, they work almost counter to traditional development, and these factors combine with their being created and operated outside of the control of corporate landlords means that they represent new and meaningful competition to those landlords. Thus, efficiencies are sought and prices drop.
Encourage ADUs. Avoid subsidizing large developers and corporate landlords. If there is the political will, get the government directly involved in constructing subsidized owner-occupied, human-scale housing, as in Singapore and the pre-Thatcher UK. Relax zoning and build out public transit and car-free infrastructure in order to reduce the accessibility premium, as in Japan. That is how "build more" actually can work to lower rates.
Black communities were bulldozed to make way for highways for being "slums" and forced into isolated "public" housing. This only concentrated the issued of crime and poverty and moved it out of sight of richer whiter communities. This was labeled as "Urban Renewal" and passed under the Housing Act of 1949.
It's not just public housing it's all housing. Even some public housing advocates argue against housing reforms that would make it possible to build public housing!
I've been supporting an advocacy group looking to build social housing and at least half the pushback is from anti-housing "tenant advocates" that work for non-profits funded by extremely foundations with boards that are all very wealthy with multiple homes, and don't see the need for more housing. The "tenant advocates" seem to view housing similarly and only support public housing to the extent that it doesn't actually get built.
Pretty much all housing is housing that people are going to live in...
Unless you are only talking about housing for a certain type of people, and that you'll only approve housing for that type of people, otherwise no housing? That's a very common position that I disagree with strongly.
Soak the rich, let them pay for the high cost of new housing, and it benefits everyone.
For public housing, it should be for all incomes so that those with high incomes subsidize those with lower incomes, so that the public housing has support throughout all levels of society when it comes to vote for maintenance every year, so that when there's a budget cut it's all of society fighting to ensure that the public housing is maintained.
We need to break out of the idea that only some people deserve to get housing, and that we should build just for that narrow band of people. New housing is expensive, we need a lot of it, and those with money are the ones who should pay for it.
Yes, we all have a right to a decent place to live! But unless we can accept public ownership of land (and therefore housing), there's not much to iterate on and we're left with today's reality where we happily let millions live on the street for no fucking reason
The obvious reason is that to a first approximation nobody is building public housing, and so appeals to public housing, especially from owner-residents, read to housing activists as a dodge, a way to perform advocacy for housing without actually providing housing.
A subtler reason is that public housing is drastically more expensive to build than private housing. There's multifarious reasons for this, and the underlying problem is absolutely worth solving (it's one of the three big prescriptions in Abundance), but it's a bigger problem than housing. Right now, people are focused on whatever's going to bring the most units online fastest.
Is this actually true? Singapore seems to have built, well, their entire country around public housing. I can understand this being more expensive, but drastically so seems hard to believe.
Bringing more units online won't matter much if people can't afford them. Zoning (which is what I take abundance to refer to) can only do so much—we will need to attack housing as a commodity (or an asset, depending on who you listen to) in order to make a dent on the housing issues outside the upper middle class.
Is there a current best practice for public housing? I remember a project here in South Australia that integrated some apartments for low-income or homelessness-risk tenants, amongst other tenancies. Idea being that it made for a melting pot rather than risk of only slum or only premium housing. But I don't think it was done at any real scale.
They were historically used, at least most notoriously, for selling crack and sniper fortresses for organized gangs. Your average American envisions something like Cabrini Green when you say public housing.
People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down.
The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc it would follow - both to pretty high level of accuracy.
The point is that, of course, building more houses has a tendency to reduce rents. The question is whether reduction is -0.1% or -10% or there is an increase of +5% because some other factor was more dominant. It would be very hard for policy makers to argue against building more housing, if there was a quantitative model that predicted exact numbers for how much rent fell down given all relevant factors, and this model had been validated over and over again by prediction (not retrodiction). Rather than "rock fall down if you drop it" model that everyone keeps quoting.
We don't need quantitative models if we want the rock to fall. It might be nice to have them, but one of the great things about market economies is that we don't micromanage according to overly complex estimates, and get better results.
Zoning and homeowners are holding on to the rock with a death grip, all while saying "the rock won't fall if we let go, that's fake science, it's far more nuanced you see" as they lie through their teeth to make big profits and immiserate those who don't own land.
The quantitative model will tell you whether building housing of type A of quantity B results in more of a decrease in rent than building housing of type C of quantity D. Then you choose the policy that results in the desired decrease in rent. Otherwise, you risk wasting time in pursuing a policy that only results in a 0.1% decrease.
You do have a strong point, in that homeowners are eager to approve plans that allow for ADUs but disallow anything slightly larger. Homeowners already have housing, don't often need more of it, and like having complete control so they approve plans that allow ADUS with the knowledge that it won't account for any significant new housing, and new housing is directly against homeowners' financial interests.
But in reality, the political choice of "let's build A, or B, or C" doesn't exist to maximize the effect of housing. People overly focus on highly regulating to a specific type of housing to prevent anything from getting built.
Let people decide for their own what type of housing they want, and all of a sudden we'd have enough of it. That's the biggest fear of landlords and homeowners.
Most rent payers aren't concerned with the exact function that will describe the shape of the curve for decline in cost of rent.
They are mostly interested in "rent go down", or at least "rent not go up".
That said, there are people who have studied this. You don't need Newtonian level math to calculate elasticity. Hell, we can look at how rents rise in a constrained market and make a pretty good guess what would happen if supply increases.
There are dozens of papers that have these numbers when you search the academic databases for "rent elasticity"
Lots of places in the world have legally mandated percentage by which rent can increase for a unit per year. It might be 2% or 3%, but it is a fixed number that is fought over politically before being decided. That is the function that you are claiming rent payers don't care about. But they do, as evidenced by elected officials enforcing the number they think will get them the most votes.
That’s completely distinct from increased supply driving down rents through market mechanisms. That process is completely independent of supply and demand in open markets.
People don’t give two shits about politically determined rent caps if rents are dropping through supply increases. I’ve lived in those places you describe and that mechanism creates market distortions that paradoxically drive rent way above the market clearing price for new entrants. In any case, none of those places place restrictions on lowering rent due to competitive pressure.
Notably, though, a significant fraction of people seem to believe that building more housing will cause rents to increase. So it seems like it is still important to point to data suggesting the opposite.
Housing is a unique market, because every single product in it is unique, and prices and rents can vary quite a bit.
In a city I used to live, the city decided to revitalize a section of downtown by bringing down some old small buildings and replacing them with high rises. The resultant effect was a bloom in shops and restaurants in the area. That meant that 1km^2 area became a lot more attractive, landlords jacked up rents, and existing tenants in the other buildings in the area had to move out for people who were willing to pay 2x the rent. Of course rents probably went down elsewhere in the city to compensate.
You will never get this sort of prediction from simply supply and demand. You need to build quantitative and holistic models that make predictions based on a range of factors. Then use those to make policy.
I don't think the predominant factor causing pollies to shy away from increasing housing supply is a lack of understanding that supply decreases prices, it's a lack of political will to decrease prices.
It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.
In a city like San Francisco, relative to the status quo ante easier development is more likely to result in slower growth in home prices, not a reduction in home prices.
But that's not the reason most San Franciscans oppose development. The primary reasons are 1) they're convinced more development will raise prices, 2) they believe affordability must be mandated through price controls or subsidies (e.g. developers dedicating X% of units for below market prices), 3) they insist on bike shedding every development proposal to death, 4) they're convinced private development is inherently inequitable (only "luxury" housing is built).
Pretty much the only group of people in the city worried about housing stock increases reducing prices are developers trying to sell-off new units. But developers are repeat players, and they're generally not the ones lending support to development hurdles. Though, there is (was?) at least one long-time developer who specializes in building "affordable" housing--mostly at public expense, of course--who did aggressively lobby for development hurdles, but carefully crafted so he and only he could easily get around them.
> It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.
The only thing they can exchange it for is another house or an alternate form of housing. Because you have to live somewhere.
But what I have seen is worries about social class and sharing space with new neighbors who act like they're from the next rung down on the ladder. Which isn't all that different from the usual objection to short-term rentals.
Yes, but many people use geographic arbitrage to exchange their house in a supply constrained area for a house elsewhere and enough money to never have to work again. Notably, the more you can work to restrict supply once you already are in the market, the sooner you can move to Costa Rica.
If I could lobby my government to restrict other people’s use of their property in a way that would give me enough money to create a generational wealth in exchange for moving somewhere with cheaper houses, I would be very tempted to be that asshole.
> It would be very hard for policy makers to argue against building more housing, if there was a quantitative model that predicted exact numbers for how much rent fell down given all relevant factors, and this model had been validated over and over again by prediction (not retrodiction).
Policy makers are experts at completely ignoring objective facts, why would this be different?
Incredible. So what you're saying is... we should just build more housing? Who would have thought that was the answer?
I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?
you're not the one with stuff to reconcile
simply ask the people on the vested side: "why do you want rents to stay high?" and stand back
A house next door to me sat vacant for 4 years here in Vancouver. The owner couldn't sell at the asking price. The owner never lived in the house himself ever. He couldn't lower the price because then he would be losing money (selling it for less than what he bought it for).
Over that 4 year period, immigration to Canada dropped dramatically.
It just recently sold for slightly lower than the asking price (but slightly more than what the owner had bought it for 4 years prior). It was sold to a new immigrant to Canada. At least the new owner is actually living in it.
Why would developers want to build so much supply that the price drops?
Easily.
Many of those people have a correct observation in that new construction is just luxury housing, which is obviously unaffordable for people struggling with rent.
What they fail to miss is that for every luxury unit that's built and is occupied, some well-off person moved into it... And out of a shitty, cheap unit that's now on the market.
Almost all new construction is luxury housing; it's what pencils out. The mechanism by which it reduces prices is by reducing demand pressure on older housing stock, which would otherwise be bought up and rehabbed by the same people moving into the "luxury" housing. The constraint that makes this work is increased density: so long as you're adding net units to the market, new construction at any price level will reduce prices in the market.
As someone who grew up in San Diego and now lives in Dubai, I point towards how much of the construction companies in Dubai are partly government owned and were at once fully owned before the government sold shares in their IPOs.
I really don’t understand why the California government doesn’t just build luxury condos at a large scale for profit. The state will get revenue and lower housing costs overall.
Not a bad idea, should have started with a 2 family house before trying to build a high speed train.
Private companies are good at removing inefficiencies. As long as there is competition, private companies will offer better service at lower price. State-owned companies work better in cases where maintaining healthy competition is not possible, or where inefficiencies are not a concern.
In particular, Gulf states have virtually unlimited money, which means that it doesn't matter whether a new construction costs $400k or $800k or what.
It's very rare to find state-owned companies which main goal is to provide service to the citizens and they turn a profit without some form of government subsidies along the way. Let me ask - if you think there is huge market for new construction and it's easy to make profit, why don't you start a construction company?
Except Medicare disproves this as a universal case. Government can run efficiently.
It's 'easy' if you have inside connections with the planning and zoning committees and utility companies. I recently developed a property worth about $250k for about $100k. The building process itself is relatively cheap (land + cost construction way cheaper than value of a finished property) and straightforward, everything else is not.
The only reason why I was able to get it done as a random person was because I used a non-commercial loophole to not have to get the inspections that are used as hostile clamp on disfavored competition, and the utility companies that could have charged me a gazillion dollars saw that I was just a guy with a family and took pity on my situation (they are used to dealing with large commercial developers) and gave me the easiest out at every opportunity.
If you are a favored developer you can get things done as easily and almost as cheaply as I did and make vast profits. If not you are fucked and you barely break even because either government workers, or government franchised utility monopolies fuck you at every turn. I lost count of how many times I basically saved $20k-$30k because someone decided not to fuck me that day over some inane detail that in the end doesn't actually make any meaningful difference (the only time I got unlucky -- a utility worker made me redo a survey which cost thousands and then LOLed later that I never needed it, eventually it turned out this person was literally just making shit up which is an astonishingly common tactic when some asshole just wants to delay dealing with you. I was only able to fire this utility company because I was on the border between two monopoly lines which created an unusual point of actual competition, and the next one used a ton of creativity to get the same thing done for relatively next to nothing).
Okay so basically the problem is a system of overly complex rules that don't serve any purpose besides cementing the current influence zones. Creating a state-owned company to navigate these rules won't make the whole process cheaper, only changing the rules themselves will.
I am begging you to write a detailed overview of how all of this played out.
Why? The level of graft would be breathtaking. No doubt some major builders would get preference for cost plus budgets on inflated numbers. Politicians would steer money to their supporters.
They’d like be building at 1.5 to 2 times what private does.
Because government bureaucrats need to be let in on the take to make it worth their time. Graft is how that gets done. Otherwise they usually just stonewall housing.
Paying $1 to government shills and corrupt capitalists for every $1 spent on actual housing is still a hell of a deal compared to not being able to build anything, which is the status quo in many locked up parcels. A moral standoff and resting on your principles of not funding graft sounds nice, but doesn't accomplish anything.
>Paying $1 to government shills and corrupt capitalists for every $1
And then some forensic accounting happens and a paper is published citing that government built homes cost twice as much as privately built, and the program stops.
It doesn't seem to stop all the other graft-ridden wasteful parts of government.
Personally I despise the idea of public housing, but once something is there, it becomes easier to develop. There has to be some way of enticing all the factions stopping housing with productive greed rather than anti-productive greed. If public built housing gets something where there was nothing until the first paper gets published or whatever, maybe it's worth doing a deal with the devil.
Because that's communism
luxury housing? I see miles and miles of $650k townhouses that look like government housing. It would be much easier to cut demand.
The question is whether the well-off person moved in from the same market, or from elsewhere. (Also, whether they vacate their previous unit or, e.g., keep it as a vacation home.)
None of those are really pertinent because it doesn't change the fact that the well-off person is going to occupy an additional housing unit in this scenario no matter what.
The question is whether it's going to be new construction that they occupy or existing construction. If you're not well-off you'd want that decision to end up with "new construction" so you can move into "existing construction" at a lower rent/mortgage than if new construction didn't exist.
I don't think that is necessarily true. I believe there are, for instance, many reasonably wealthy people who live somewhere outside California and would not move into a dumpy old apartment in LA or SF but might move into a fancy new one. In other words, they will not occupy an additional housing unit (in a given market) unless it is "nice" enough.
I am in favor of building new housing, but I'm even more in favor of reducing wealth inequality. I think we can do both, but we need to be deliberate about it.
> I believe there are, for instance, many reasonably wealthy people who live somewhere outside California and would not move into a dumpy old apartment in LA or SF but might move into a fancy new one. In other words, they will not occupy an additional housing unit (in a given market) unless it is "nice" enough.
That's the point, the "dumpy old apartment" was never going to be the thing stopping the rich person from moving in.
Due to overlap in preferences amongst a multitude of people, the rich person would free up the housing they like by buying it from whoever, who would then free up slightly-less-good housing in the area by kicking out someone else (with money, to be clear) and so on down the chain until you get to the "dumpy old apartment", whose rent now rises because there are more people interested in moving into it due to lack of other options.
New housing, even if it's new 'luxury' housing, breaks this chain of housing migrations in the area before it gets to buying people out of their dumpy old apartments.
Taken to extremes you'll have all wealthy people living in California, and the rest of the country available to us plebs.
The greatest tool we have to reduce wealth inequality is make it so people can buy homes - and the biggest levers we seem to have there are making supply available in general, and making jobs available where there's already supply.
> Taken to extremes you'll have all wealthy people living in California, and the rest of the country available to us plebs.
Which is exactly what people are afraid of happening, and what they mean by the crisis of housing affordability.
You can go and buy or rent a cheap house today in probably 90% of the localities of the USA. Of course, if you already live in those places, you probably don't have the money, because good work is very hard to find.
The problem of housing is that regular people want to live in NYC, and Chicago, and LA, and all of these places, and relatively near to where their jobs are, and they're seeing the rich own more and more of the space that could have allowed them to do so.
"The problem of housing is that regular people want to live in NYC, and Chicago, and LA, and all of these places, and relatively near to where their jobs are"
It's not clear in your phrasing, but it sounds like this is a casual correlation. It's not... Many people only want to live in these cities because it's the ONLY way to get work, given a choice they would quickly move out.
Or, maybe the jobs are there because people companies want to hire want to live there. We have a way of testing this now given that remote work is a thing. We can see if people would rather work remotely from a cheap house in rural Kansas and have nothing to do in the evenings or live in an expensive apartment in an exciting city where their job is.
It is a cycle that always leads to increased population density, and has done so since the dawn of agriculture. People tend to go where there are more people, and then work and entertainment happens where most people are, which attracts more people, and so on. This was as true in Ur as it is in NYC.
>I am in favor of building new housing, but I'm even more in favor of reducing wealth inequality. I think we can do both, but we need to be deliberate about it.
... And that's why nothing gets done.
This is the common refrain, however, consider:
There were two shitty, cheap units. The people in the first were forced to move out when a developer bought it, tore it down, and built the luxury unit. They have been homeless/going into debt renting a third slightly-less-shitty third unit. Without the first shitty, cheap unit, the second's competition was that third slightly-less-shitty unit; they raised their prices commensurately.
The well-off person moved into their nice new unit. The poor person's choice is staying in the unit they can't afford, or spending thousands on moving costs to go to a shittier unit that they also can't afford. Oh, and the city "motivated" the luxury unit's development with tax incentives. A larger percentage of the poor person's check is now going toward paying that back.
This is the reality once you get past simple narratives and reconcile with the fact that building tons of luxury units hasn't actually moved the needle.
The whole point of this article is that building tons of new "luxury" units actually did lower rents, moving the needle exactly as predicted.
The zoning code in the location of your anecdote must be completely suffocating, or that developer would not have left so much money on the table by failing to add more units.
Where I live, a developer recently tore down the cheap, shitty house on the corner and built not one new "luxury" townhouse, but eight of them. Across the street, a larger building was recently demolished, and now they're putting in twenty-one new units. Two cheap homes lost: but a net of twenty-seven homes gained. That represents a whole lot of competitive pressure taken off the lower end of the market.
See https://news.ycombinator.com/item?id=47858770
It's not traditional development lowering rates. Think about the math. You've replaced two cheap homes with twenty seven "luxury" homes. How would that lower the average price? You've weighted the average rate with an order of magnitude more samples on the top half of the range. The only way to see a drop is for there to be a precipitous drop in low-end rates, or a significant increase in low-end, non-traditional development. I think it's the latter, because California has uniquely supportive ADU policy, and implemented it on a timeline that tracks with the rate decreases.
EDIT: Also the end of ZIRP and refinancing finally coming around.
Oh, wouldn't it be funny if lower rates had nothing to do with building volume, and everything to do with landlords having to pull units out of warehousing because their interest rates increased recently?
Thank you. Too many people genuinely believe it is a simple supply and demand problem. Housing is a much more complicated "commodity" than people want to concede.
Where do you see developers buying up units to tear them down and replace them with the same number of units?
When I see properties getting redeveloped it's usually a tiny house getting replaced with an apartment building. Often it's a strip mall or surface parking lot that wasn't housing anyone getting replaced.
I don't think I've ever seen a redevelopment that doesn't significantly increase the amount of living space.
>Where do you see developers buying up units to tear them down and replace them with the same number of units?
DC. And when there are more units afterwards, they're luxury. Building more units doesn't magically lower rates; it has to drive landlords of older units to lower their rates. Did that actually happen? You'd have to prove it. Something else could have, like increased non-traditional competition or the end of ZIRP and refinancing horizons coming to bear.
That's nonsense. DC has gone from 297k housing units in 2010 to 369k housing units in 2024[1][2].
Developments generally involve more units than what they are replacing.
[1] https://www.census.gov/data/tables/time-series/demo/popest/i...
[2] https://www.census.gov/data/datasets/time-series/demo/popest...
> What they fail to miss is that for every luxury unit that's built and is occupied, some well-off person moved into it... And out of a shitty, cheap unit that's now on the market.
Ah yes, good old trickle down economics, applied to housing. It's obviously always true that the people moving into a new luxury home are coming from existing lower-luxury homes in the same part of the same city, and will immediately sell or rent those homes off at prices no larger than what they themselves had paid for them and no more.
And we're basing all of this on a tiny decrease in the prices of new rent offers in one of the most expensive in the USA, which built a tiny amount of extra homes recently, not even clear of what type. Clear causation well established.
If demand for cars skyrockets then you (eventually) get more cars at the same price coz the manufacturer can just make more.
If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
So no, supply and demand doesnt really work for land the way it works for everything else.
Land needs to be taxed a lot to create enough supply and in California prop 13 quite deliberately did the precise opposite of that.
Zoning that reduces buildable footprint and/or height artificially increases demand for land. If the only way to build a home is to buy a 9000 sqft lot, then my demand for land is 9000 sqft. If you can build 18 homes on that same lot, my demand for land is 450 sqft.
Land definitely needs to be taxed, but not without the zoning changes first to allow more to be built on less.
Zoning is the hobby horse of property developers. They're endlessly frustrated by the way zoning prevents them from building the most profitable construction - no matter whether there is a good or a bad reason for it (sometimes it's good sometimes it's not).
This inspires a lobbying and public outreach effort to try and convince people that relaxing zoning rules will fix everything.
As with many corporate lobbied for campaigns, it may be a good idea in general (e.g. net neutrality) or it may not be but it's definitely never the panacea it's sold as by the well funded PR campaign.
This is empirically not supported. Relaxing zoning rules works extremely well.
Look at Japan, look at any metropolitan U.S. city that has actually leaned into it. Europe has had mixed use zones for effectively centuries and is not the dystopia that NIMBYs proclaim will appear in the absence of zoning.
It is unpopular because we subsidize the lives and assets of people who “have things” through zoning policy that they make.
Up to a point. Yes, it is nice to mix housing and retail and the like, and some zoning laws prevent this. But you have to look back into the 19th century before zoning laws existed and you had things like slaughterhouses opening in residential neighborhoods. Zoning has good reasons to exist.
Residential and commercial can work pretty well together, up to the point of noise and chemical risks. Industrial will pretty much always need to be zoned because of different hazards it presents.
Correction: zoning had good reasons to exist, but it doesn't anymore. Everything that we used to solve that problem is better solved by environmental laws than it ever was by zoning. It turns out that if you make companies pay for their environmental pollution via noise, chemicals, air pollution, etc., they tend to locate their industrial capacity where it is easier to solve or less impactful.
And while every single reasonable but outdated justification for zoning has slowly disappeared, zoning has been thoroughly co-opted by greedy sociopaths and meddlesome wannabe HOA presidents who want to control their neighbors and police aesthetics and keep out undesirables and inflate the value of their investments.
Taxing land works better. Look at Japan where property taxes encourage development.
TFA shows that it was zoning changes that allowed the influx of housing and lower prices. You can find similar articles across the country everywhere that has had significant relaxation of zoning restrictions, like in Minneapolis, Austin, and Seattle (just off the top of my head). This includes places where building code and permitting processes have gotten more arduous while the zoning was relaxed.
I don't care if it is a panacea or not...If you want to convince me that restrictive zoning is not the most significant cause of our housing affordability crisis, you'd have to find some better proof than "developers like upzoning and developers are bad people".
> Seattle
Source for Seattle? I know there was a state law a couple years ago allowing for more housing, but I haven't seen reports of its effects.
"It won't fix everything" doesn't seem like much of an argument against it, though?
It's like the starfish tale - https://www.thestarfishchange.org/starfish-tale
Adding a dwelling unit won't solve the problem for everyone - but it will solve the problem for someone!
(Now there's perhaps an offset argument - if you can afford to build or buy, should you build so as to increase the supply?)
>If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
Yes but people aren't trying to buy land, they are trying to buy housing, which yes, has a foundation on land but also can increase vertically without significantly increasing the land usage.
It does, because factories don’t have unlimited production capacity. See what happened when Covid hit, or when interest rates go down. Used car prices go up with it too.
Land != Housing.
If the alleged people actually said this, and they wanted to "maintain high prices", then why would they oppose more building? If they believed "supply and demand don't work at all", then more supply wouldn't hurt their goal of maintaining high prices.
A former trustee in the inner-ring suburb in which I live owns and manages rental housing throughout the municipality and is a vocal opponent of building new housing, and of the argument that supply and demand functions in the housing market. I could screenshot him for you, but you have no idea who he is, so: just take my word for it, these aren't "alleged" people. They're a major force in local politics around the country, which is where this fight is primarily being fought.
Leveraged investors in real estate become incredibly "conservative" really fast - not politically but in the "don't ever change anything holy shit I'm on a knife edge" even if the changes would be a net benefit for them.
For the same reason that NIMBYs care so much about urban trees or spotted owls. They don't actually give a shit about them, they just are willing to say or do anything to sabotage the process of increasing housing supply.
I'm as big a YIMBY as you'll find, and urban trees are really important to making a city a nice place to live. There's no contradiction to those positions - just, you know, build more housing and plant more trees. (Spotted owls, of course, have nothing to do with urbanism, so I don't know how they got dragged in here.)
Being a NIMBY I want to live in the neighbourhood I bought a house in, not the one someone who can leave with a months notice feels like turning it into.
Being a homeowner, you get a title to your lot, not your entire neighborhood. You have no legal claim on your neighbor's home. If you want a legal claim on your neighbor's home, join an HOA. Or just buy it.
You do. It's called zoning.
I'd be willing to bet you every last dollar on the planet that if you read your deed, you will find zero claims to any particular zoning. Zoning is not a transferable property right. It can be changed for any reason at any time.
I’d love to take that bet. My deed (in Texas) states that my lot is subject to the rules of the subdivision which include a number of zoning style restrictions. (They’re called “deed restrictions” and are very common AFAIK.)
The subdivision rules are changeable only with a supermajority vote. I believe the city (Houston in my case) is prohibited by the state from unilaterally changing them.
(I wouldn’t mind more free property rights!!! I find TX “liberty” is often biased towards $$$)
I would gladly see that bet through because that's not zoning, even if its effects are the same as zoning. Subdivision rules are a restrictive covenant (much like how HOAs work). Zoning is not a restrictive covenant, it is by definition a municipally-reserved restriction on land uses, and can be changed at the discretion of the jurisdictional authorities.
I've actually encouraged NIMBYs to use those HOA-style restrictive covenants if they're so adamant on their "zoning" never changing, because a restrictive covenant is actually a volunatory restriction. A city cannot come in and remove them willy nilly (they do in special cases like red-lining, but it is a politically arduous process). Someone with a restrictive covenant by definition has more protection from their neighborhood changing than they would if they just relied on zoning.
The problem is, nobody likes restrictive covenants, and they don't like the HOA-like structures that govern them, and they really don't like the punchable-faced people that seek power in those kinds of organizations.
So can the US constitution through amendments, but it's not easy.
... with a vote. And subject to the takings clause.
The government can also just take your deed and property, again subject to the takings clause, so long as they pay you back. Or claim someone was slinging crack there or something and not pay you back.
If you're including things subject to the democratic process all the above is on the table.
Also plenty of things written into the deed don't mean shit. It's quite common to read a deed that says something like, in more fluffed terms "no black people allowed." This got baked into lots of deeds back in the day and never got changed because removing covenants to a deed is usually next to impossible. It doesn't mean dick because again the government can simply add or subtract by fiat what your deed actually means.
What your deed is and isn't is a lot closer to how zoning works than you think. Ranchers found this out when their transferrable private property grazing rights tracing back to the very founding era of the USA got usurped by the government and ultimately the BLM who turned around and actually said they're public federal property (which resulted in things like, the Bundy standoff).
If your neighborhood's zoning isn't in your deed, how are you going to claim it was taken from you?
Zoning is a restriction on your rights...when they are lifted, you are gaining more tangible rights, not losing them. If anything, the takings clause should have applied to properties where zoning was introduced...not where it was removed.
Zoning belongs to all the voters in the municipality, not just the homeowners.
It's a beautiful state of affairs when owners of property can collude for their interests with almost no restrictions, but worker unions are almost entirely defanged.
With good reason: https://www.cfmeuinquiry.qld.gov.au/__data/assets/pdf_file/0...
I have paid between $3,000 and $6,000 personally to organized crime so a bunch of bogans can buy American suvs to kill cyclists more efficiently.
Meanwhile, nobody bats an eye when housing prices inflate $300,000 because existing homeowners are doing their fucking hardest to make sure that no new homes get built.
Yes, home owners: https://www.theguardian.com/world/2026/apr/12/canada-migrati...
Funny how when you hit the breaks on pupulation growth house prices also freeze.
And then a decade of that later, all the people bitching about immigration will be wondering why the country's demographics resemble that of a nursing home, and why the tax base and the social safety net has collapsed.
The social safety net has collapsed _today_.
Hospital wait times in Canada, Australia and the UK are _years_ for elective procedures. I had a health scare three years ago and got put on the public waiting list. I still get a message every 6 months to remind me that I'm on the waiting list.
I've still to advance far enough up the queue to get a date booked.
This is not normal.
> The social safety net has collapsed _today_.
It can always collapse more. Ask anyone who lived through an actual economic collapse. (As opposed to the kinds of minor corrections that the West has seen over the past few decades.)
Your imagination is very limited if you can't think of what the long-term consequence for a country with an average age of 41.6, a fertility rate of 1.25, and a huge political block of nativists who can't do basic arithmetic, are asking for something incredibly stupid, are getting exactly what they want, good and hard.
You solve a housing shortage by... Building more housing. Not by driving young people who want to do work out of your community.
Destroy your society today so it doesn't get potentially destroyed in 30 years is certainly a take.
>You solve a housing shortage by... Building more housing.
It's not housing. It's roads. Hospitals. Schools. Sewers. Power lines. Everything needs to be rebuilt. That means that the immigrants who are coming in must be engineers, doctors, teachers, tradies. Instead we get uber drivers and IT consultants. There aren't enough qualified people in the world to keep up with current immigration to the west. The only solution is to lower immigration until the ratio of qualified people coming in matches (or hopefully exceeds) the ratio of qualified people already here. Anything else lowers living standards and makes a right wing reaction inevitable.
Here's what happens when you build more housing: https://www.abc.net.au/news/2023-08-25/one-hour-delays-along...
> Destroy your society today so it doesn't get potentially destroyed in 30 years is certainly a take.
Immigrants coming in today aren't 'destroying society'.
And it's not 'potentially'. It's certainly. Nativists have no answers to it, and if they actually presented the dilemma of 'We can keep Pablo out, and also anyone currently under the age of 40 will have to work until they are 75', not a single person would give their ideas a moment of thought.
> It's roads. Hospitals. Schools. Sewers. Power lines. Everything needs to be rebuilt.
Why does it need to be rebuilt on anything beyond a regular depreciation schedule in a steady-population situation?
And by the way - Canada needs to invite at least half a million people a year in order to maintain the population at a steady-state. That number is the table stakes.
>And by the way - Canada needs to invite at least half a million people a year in order to maintain the population at a steady-state. That number is the table stakes.
In 2025 total deaths in Canada were 334,699, totals births were 368,928.
The table stakes is -30,000 immigrants last year.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=171000...
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=171000...
>Why does it need to be rebuilt on anything beyond a regular depreciation schedule in a steady-population situation?
Canada is not at steady state. It's been growing at over 1% since 2000:
https://ourworldindata.org/explorers/population-and-demograp...
> In 2025 total deaths in Canada were 334,699, totals births were 368,928.
If you think that's not a problem, stop cherrypicking numbers, and look at Canada's population pyramid. And then tell me what will happen as the big fat middle, that starts at 25... ages out of work. Do you think that little sliver of 0-24s are going to be holding everyone else up?
https://en.wikipedia.org/wiki/Demographics_of_Canada#/media/...
Those are the numbers you need to be looking at. Oh, and emigration isn't zero, but someone leaving the country isn't counted as a death on the census. 120,000 people emigrated in 2025.
In that case we aren't in a steady state population case and we need to build schools, hospitals, public transport, water, power etc.
Which means that we need stop importing low skill labor in the IT and services industry and move to high skill labor.
The developing world unfortunately doesn't produce enough for the current immigration levels in the west. Ergo we must lower immigration until the ratio of high skill migrants is equal or higher than that of the native population.
I have a bridge to sell you
I think this us a fair feeling. One chooses a house based in part on the area as the specifics of the house itself. Wanting the neighborhood to remain unchanged is a reasonable desire.
Unfortunately, as much as you desire it, it's not something you can control. Neighborhoods change all the time. That good school you moved to be close to can decline, people with the wrong politics can move in next door, the convenient mall may close.
Yes, local politics gives you a vote. But of course we all get the same vote, homeowners and wannabe homeowners.
So, I think your want is valid, alas though you have no rights to your neighborhood and so your want is just what you want.
Of course you should stand up for your wants. But wants are not rights. So it's equal to everyone else's wants.
I'm upvoting you because your desire is not invalid. However, and I don't mean this perjorativly, your wants don't legally count for much. Just as much as any other person.
Part of the problem (or the solution depending on what side you stand on) is that only residents get a say, and often you find that the renters become just as nimby as the owners, especially if rent controls or other advantages are in place.
And those outside have a very hard time voting where they want to live but don't.
(The old solution was to make a new city that was like you wanted, with blackjack and hookers, hell forget the city we'll just build the strip!)
If demand picks up because supply increases, you will reach the previous equilibrium even with more supply. It isn’t rocket science, there is a price people are willing to pay to live in SD, and the market will keep gravitating to that price unless demand is somehow limited. The price people are willing to pay can even increase as density makes brings in things (eg culture, job opportunities) that make the city more desirable (eg see Hong Kong).
At the levels of density seen in Paris, San Diego could house 16 million people. That's city proper. The metro area could house 226 million people.
You're gonna have to do a lot better job convincing me that 16 million people would move to San Diego if they just built more housing. Let alone 226 million.
Twist do you think happens to every city that has reached 16 million people? Did they become more popular or less? Given that I’ve lived in a city of that size, my answer will differ from yours (they become more expensive, not less).
I’m confused on why you think paris is affordable and San Diego metro could somehow have enough water to grow to 220 million. The nearest comparison I can think of is south China Bay Area population (87 million), and if you think that those cities are affordable…I’m guessing we really have to agree to disagree.
> Twist do you think happens to every city that has reached 16 million people?
It's not about the exact number, it's that one city is not going to 10x in population from getting the price of housing down to "still a city but not skyrocketing".
> I’m confused on why you think paris is affordable
Compared to San Diego, it does seem to be significantly more affordable, and mainly because of rent.
> and San Diego metro could somehow have enough water
The most expensive source of water, desalination, should be under $1 per day per person. And there's probably better options.
> to grow to 220 million.
That number is a silly number to explain density, not a proposal.
> and if you think that those cities are affordable…
No, the only comparison point was Paris, and the density of Paris.
There is no way for San Diego to grow that fast overnight anyways. If it grows gradually, and it’s still desirable, that will attract more jobs and more people eventually, the city won’t become more affordable (long term) until it stops attracting new residents. Otherwise, new housing simply provides temporary relief while the city grows.
Paris is a good example, I think, of a city expensive by French standards. My point was that if your theory is you can build to affordable, there should be at least one example on the planet where that actually worked (even Tokyo is considered expensive by Japanese standards).
> the city won’t become more affordable (long term) until it stops attracting new residents
I really hope we don't have indefinite large amounts of US population growth. And if we mostly stabilize the population, then it only takes a few 16M cities to absorb all the demand and make the relief permanent.
> Paris is a good example, I think, of a city expensive by French standards. My point was that if your theory is you can build to affordable, there should be at least one example on the planet where that actually worked (even Tokyo is considered expensive by Japanese standards).
Then consider this particular argument not that you can build to a nebulously defined "affordable", but that you can build to "San Diego has between 100% and 1000% of its current population with rent 40% lower than it is right now".
San Diego would be a very popular city at lower prices, but simply put there isn't enough population in the US to even think that demand could grow anywhere close to those levels. It would take a 50 year long gold rush, draining of other American cities, etc. The fastest growing city in modern history, Shenzen, grew 6000% in 30 years, and it could only do so because China simultaneously had the highest population growth in the world and the highest urbanization rate in the world.
At some point, demand is saturated, and it takes an extremely delusional belief that demand can perpetually grow so that prices never drop. We have proof in the article that prices can drop with even moderately fast construction rates. Keep going.
Yet the rent in Paris is still too high for an average French resident; and while rent is lower than in San Diego, the price of an apartment is higher. And, of course, median salary in San Diego is far higher than in Paris.
>Yet the rent in Paris is still too high for an average French resident
It's obviously not just about more housing, but more housing per capita.
3% of the French population lives in Paris proper, and roughly 20% in the metropolitan area compared with 0.42% in San Diego and ~1% in San Diego MSA [1].
More hosing will help Paris along with San Diego to put downward pressure on prices.
[1] Wikipedia
There a lot of desirable areas in a country and a fixed amount of people.
The equilibrium between demand and supply has the supply curve impacted by a whole host of policy choices.
Eg housing is impacted by cost of permitting, regulations, cost of materials and labor etc.
All of these things can be improved by policy.
There's a strong argument that especially infrastructure but housing should be built with people on work visas.
Water is the primary limiter on city population sizes in the west. I wouldn’t be surprised if San Diego wasn’t at its limit already with respect to water resources, but I haven’t looked into it. Desalination could improve that.
If we could have Chinese work crews come in and build housing, especially 30 story concrete towers that are popular in Asia, we could build fairly cheaply, that isn’t really the limitation (it’s easier to solve than getting water to those new units for expanded population).
San Diego in fact has a surfeit that it's looking at selling off
https://www.nytimes.com/2026/04/17/climate/san-diego-water-s...
They thought Vegas was at it's limit years ago, but no they found efficiency upon efficiency.
No, this is a false belief known as supply skepticism: https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=supp...
Weird title for a paper that argues that "Government intervention is critical to ensure that supply is added at prices affordable to a range of incomes". I would personally classify that position as "supply skepticism".
Supply increased, rents declined.
Short term. Long term the market will change to equilibrium. If you are buying, just lock in lower housing prices now. If you are renting without rent control, you get one or two years of reasonable rates and then it will go nuts again.
This is an obviously farcical belief.
If everywhere built more housing do you think the price of housing would go up? Where are these people bringing up housing prices coming from?
Buffalo has 50% as much housing now as it did at its peak, since demand dropped and housing was just razed rather than maintained. There are lots and lots of cities in the USA that aren’t San Diego, LA, SF, Portland, Seattle, NYC, Boston, … and they have plenty of supply that there is no demand for. You can buy a house for cheap in Toledo. For some reason, people would rather pay $3000/month to live in San Diego than $700/month to live in Buffalo or Toledo. It shouldn’t be a mystery why.
I lived in Beijing for 9 years so I get a different perspective. But ya, the market for people who want to live in Beijing rather than Chengde or Langfang is surprisingly vast, and Beijing has a resident system to prevent at will migrations.
Housing prices always go up (they seem to believe this)
Houses can be built (this seems obvious)
Ergo, we can remove the national debt by building between 59 million and 121 million houses (depending on if you count the value of the land there).
Yes, after all there are countless examples where doing just that lowered rent long term. Simple as that, a shame that dummies don’t get it.
In fact we should force current owners to sell in order build more densely on their land! And keep doing that until their housing valuation decimates.
God most of the "discussion" around housing is such copium by obviously-biased people trying to convince everyone that we shouldn't have access to high quality housing. Yes, in the year 2026, despite all of humanity's achievements, it's of course IMPOSSIBLE to configure any type of society such that housing is decent and fair for all. IMPOSSIBLE, did you hear? Nope, it just won't work. Whatever your reason, you're wrong, society is perfect already and we cannot improve.
And the reasons people try to give... Just hilarious to evaluate from a high level. Oh, no we can't have good housing because supply and demand has determined what we have is optimal. Oh actually even if you did adjust supply and demand, it wouldn't fix the issue anyway, so don't try anything. Ah no you can't have more houses because then how will people commute?! Unsolvable! There aren't enough houses in a reasonable distance from urban centres? God well how about you just build a house in the outback where the supermarket is 200km away then! No we can't have more houses because then it will attract <demographic I don't like>. But think of the children - how will they survive without a 10 acre backyard to play in??
It's so disgustingly painfully obvious to any reasonable person that we have no reason to have a housing crisis other than certain people collecting those fat stacks of cash, sweet cash.
You say this like it is such a obvious problem to solve, and from a naive point of view, maybe so.
But each of the reasons why things the way they are isn't just stupidity. It's backed by people's preferences for living. EVERYONE is extremely opinionated on housing because it affects us the most (air/food/water/shelter...) . We all have something to say about where we live or have lived and the pros/cons.
It is. It's incredibly obvious that building more housing increases the amount of housing available.
From a cost perspective, it is solved. The communists solved it a long time ago. Build more, denser housing that is therefore much cheaper per-unit.
We don't do that because of people's preferences, and more importantly their will to force their preferences on others. But, it is solved.
Unfortunately, housing is not merely treated as a cost issue for most people. Where we live is a social and even spiritual experience. We're not bugs that mindlessly perform our economic duty and then return to our hole. We're human beings who like space, freedom, and the ability to control our surroundings.
Building the house is the easiest part of building a house.
Some: Not in my backyard.
A lot of people have vested interest in keeping the housing pricing high. That’s also pretty much why zoning and other regulations never get updated to match the demand.
I'm not sure half the country would agree!
Texas... lots of cheap land to build and some of the least expensive new home prices in the country.
I see the "supply and demand" straw man is propped up well and often in this thread. Let's talk about the actual dynamics in play:
1) Rent-Fixing: This is widespread across the country and the actual reason why inventory increases often (commonly) do not lower prices. There are multiple tactics landlords have used to ratchet up rates without ever letting them drop. These include lease concessions that don't affect the base rent in lieu of rate drops in step with lowered demand, warehousing that artificially limits accessible supply even when new, physical units are hitting the market, and algorithmic price-fixing had allowed landlords within a region to stay in lock step without breaking rank lower. When landlords are able to use such tactics with impunity, they absolutely do warp supply-demand dynamics and allow rent rates to stay high even in the face of expanding actual inventory. For rents to decline, you have to break large landlords' ability to set their price.
2) Builder Subsidies: "Just build more and prices will drop," ignores that the incentive structures municipalities use to draw developers are an additional burden on residents. These for-profit corporations then seek to make a profit on their investment, leading to no direct meaningful inventory increase in the affordable unit range. Worse, developers often target existing affordable units for their redevelopment, destroying the very units that the new inventory is supposed to ultimately reduce demand for. In order for "build more" to drive down rents, it can't be done the way it has been, which mostly ends up being a giveaway to developers at the expense of the tax base and displaced renters.
San Diego is a special case where it seems that the expanding inventory has been driven not by corporate developers, but by the construction of ADUs, which are built by homeowners out-of-pocket, are not tax-subsidized and, in fact, increase the taxable value of property. In this way, they work almost counter to traditional development, and these factors combine with their being created and operated outside of the control of corporate landlords means that they represent new and meaningful competition to those landlords. Thus, efficiencies are sought and prices drop.
Encourage ADUs. Avoid subsidizing large developers and corporate landlords. If there is the political will, get the government directly involved in constructing subsidized owner-occupied, human-scale housing, as in Singapore and the pre-Thatcher UK. Relax zoning and build out public transit and car-free infrastructure in order to reduce the accessibility premium, as in Japan. That is how "build more" actually can work to lower rates.
The trick is in creating new supply when faced with:
* Existing land/property owners who dont particularly want to give up their land.
* Property developers who would rather flog one ultra luxury unit to a foreign buyer than 3 to somebody on a median income.
* NIMBYs with multimillion dollar mortgages terrified that denser housing will push them into negative equity.
Well, that will work in a 1M people city, but in larger ones you also have to fix transit.
Another impossible problem, that nobody has ever been able to discover the solution is to build mass transit. Maybe one day people will manage to solve it.
Can't tell if serious... like The Onion article suggesting that "there's no solution to reducing gun violence, says nation with unique access to guns".
There is abundance of housing. It's just that people want to live in big metro areas that have extreme concentration of economic opportunity and amenities.
I don't understand how transforming every urban area into Kowloon Walled City will solve that unless your plan is to make it so dense that people will finally find it undesirable to live there?
At the density of Kowloon Walled City, the entire population of India could fit within the city limits of San Diego. Nobody is asking for that, silly.
We could 1.5x the density of San Diego and still have the livability of Copenhagen. We could 3x the density of San Diego and still have the livability of Vienna. We could 5x the density and still have the livability of Paris. 8x and still have the livability of Tokyo. We have a ridiculously low bar to pass, all we have to do is allow it.
Paris [1] and Copenhagen [2] have similar housing issues. Both are some of the most expensive cities in Europe [3]. Vienna has a large municipally owned and non-profit housing stock [4]. The situation in Tokyo was okay while it was growing its stock like crazy, it is facing an intensifying affordability crisis right now [5]. If there is a bliss point at which the housing crisis is solved with density before Kowloon Walled City levels, it surely not at Tokyo levels. What do you think that bliss point is? Why do you think it is a better solution to grow city densities to those levels rather than trying to make it easier to live and work in compact, mid-rise 15-minute cities that people generally seem to prefer? [6]
[1] https://www.lemonde.fr/en/france/article/2026/04/20/french-h...
[2] https://www.politico.eu/article/copenhagen-denmark-mette-fre...
[3] https://www.vanguardngr.com/2026/01/top-10-most-expensive-ci...
[4] https://www.theguardian.com/commentisfree/2025/jul/10/housin...
[5] https://www.japantimes.co.jp/news/2025/09/29/japan/society/r...
[6] https://www.tandfonline.com/doi/full/10.1080/02697459.2026.2...
Housing price is a function of supply and demand and your argument had nothing to do with price of housing, you were only talking about density and its effect on livability. And it's very clear that people value living in cities that are much denser than San Diego. If people genuinely do not want a denser San Diego, there wouldn't be any point to restricting that growth.
I personally would love to live in a city like Tokyo. People have different preferences. Don't force your preferences on me. If people "generally prefer" midrise cities, they will move there. There's a reason why so many people live in Tokyo when there are plenty of less dense cities in Japan. The great thing about allowing density is that people will stop moving in when they don't like it anymore.
> Housing price is a function of supply and demand
Yes, a function of supply and demand of everything. [1]
> your argument had nothing to do with price of housing, you were only talking about density and its effect on livability
My argument is that there is no reason to assume that increasing supply by blanket deregulation is a simple and effective solution to the housing crisis that has no downsides.
> If people "generally prefer" midrise cities, they will move there.
Many people don't want to move there because there are not enough economic opportunities, not because they dislike good traffic or green spaces.
> The great thing about allowing density is that people will stop moving in when they don't like it anymore.
If you solve all possible tragedies of the commons of that approach, sure.
[1] https://en.wikipedia.org/wiki/Sonnenschein–Mantel–Debreu_the...
I think both dense and not dense areas suffer from tragedy of the commons. The only difference is in the suburbs the effect is spread out, so you can kind of pretend it doesn't exist. Which also means that each individual person has the potential to cause more damage.
That's the issue. Most Americans don't want the entire population of India to be in San Diego. To some of us, San Diego is one of the best areas in the country. Why destroy it?
Did you only read the first sentence???
Second sentence, repeated here for clarity: “Nobody is asking for that, silly.”
Perhaps it’s too much to ask you to read the entire comment you’re responding to, but at least read the second sentence, please.
Housing is the single biggest variable in any retirement calculation, and it's the one people get wrong most often.
I build FIRE calculators, and the difference between "retire at 55" and "retire at 65" is almost always housing. A $2K/month difference in housing costs (say, HCOL city vs. LCOL area) means you need ~$600K more in your retirement portfolio at a 4% withdrawal rate. That's 5-8 extra years of saving for most people.
The math is cold: if your annual spending drops by $24K, your FIRE number drops by $600K ($24K / 0.04). Building more housing supply doesn't just help renters — it directly shortens the timeline to financial independence for anyone planning their retirement around current rent prices.
You think "most people" save at least $75k a year?
I think it's safe to assume that people close to retirement have existing appreciating assets contributing to that total savings amount.
So low supply is good for the economy because it keeps people working.
Quite the opposite: retirees will flee to low cost of living areas, taking the money that they spend in other sectors (food, health, entertainment, etc.) elsewhere.
Who is saving > $50K/year (to make up that $600K)? Must be people who are already very well off.
Austin’s Surge of New Housing Construction Drove Down Rents: https://news.ycombinator.com/item?id=47433058
> San Francisco led the nation in annual rent growth this month, with both one and two-bedroom prices hitting new all-time highs, marking the highest levels in over a decade of Zumper data. One-bedroom rent climbed 18.4% to $3,790, surpassing its previous peak of $3,720 set in June 2019, while two-bedrooms rose 22.6% to $5,270, exceeding the prior high of $5,120 recorded in September 2025.
From the Zumper report. 22% gain on SF 2B is just insane to me.
San Francisco is notoriously the most anti-new-housing city in the country.
Frisco (come at me) rent and housing prices have way more to do with the valuation of the latest startup darling than with much else.
SF (only acceptable abbreviation) is 7x7 miles square surrounded by water on three sides—the only way to grow is up, right after you knock down the 100 yro Victorian homes and historic buildings, and gut the neighborhood charms. This from someone who once paid rent 1300/mo for a two bedroom in Potrero Hill.
>right after you knock down the 100 yro Victorian homes and historic buildings
BS, there's ~400K housing units in SF, and only ~10k of those would be considered victorian. These units couldn't (And shouldn't!) be destroyed for new housing because they're protected, and that's not what NIMBY's or YIMBY's are arguing about anyway since almost everyone loves victorian homes.
More than half of the city's housing was built after 1940, mostly on the west side, and it's where NIMBYism is at its worst. There's little reason someone or even a developer shouldn't be able to build up there.
Nah, Frisco has a long history of use
https://www.sfgate.com/local/article/rappers-poets-activists...
as does 'the City'.
hehe. Frisco seems derisive to me. And The City? All major cities can be called that when in their vicinity (NYC?). But SF? It's right there on the Giant's caps!
What are you talking about? It's clearly Cisco - the bridge is right there in the logo!
SF was founded by a joint effort between Cisco and Salesforce, that's why it's called Cisco and SF, right?
Just turn SOMA into Hong Kong
At the density of Kowloon Walled City SOMA could house 2.2 million!
And we could probably do it comfortably with what we've spent on AI datacenters.
I’m gonna also say this is because biotech is in decline and major employers are pulling out. People straight up can’t afford to live there on their own.
Should note that "top US markets" really means "most expensive US markets", not for example the largest by population.
I agree, comparing to other expensive markets seems a bit odd, rather than comparing to markets with some other similarity (population, geography, median income, et cetera). The full table in the original report is much more interesting:
https://www.zumper.com/rent-research/national-rent-report
Many interesting comparisons to be made, especially places where rents fell YoY despite population growth.
It's actually a combination of both, leaving out more expensive smaller markets.
But what about the desirability of San Diego? Was the decrease in rent only because of the increase in supply, or is there also lower demand?
Very off the cuff but I do see some news about shrinking population - https://www.reddit.com/r/sandiego/comments/1s71z3a/san_diego...
That says more about affordability than desirability since rents have gone up over the decade but there's been a steady trickle out to cheaper locales
You are reversing cause/effect though.
SF rents have gone up, that didn't decrease demand. Why did SD rents drop, not because people left because it was too expensive, that doesn't make sense.
That's not what I'm saying. While they dropped recently due to the supply surge, looking at the last decade SD rents had been climbing:
https://www.costar.com/article/1297403833/san-diego-apartmen...
This suggests that San Diego has been getting more desirable over time (denser, more jobs, more culture, etc). The people who'd been around for some time that could hack the old SD rents couldn't deal with those rising costs and had been spilling over to Temecula, Phoenix, etc.
The majority of the "more housing = cheaper rent" success stories crowed about on the internet correspond with net population exodus. Austin, Minneapolis, now San Diego.
Edit: I think we should build several million more units of housing in the US. I'm salty because all the new housing I've seen is ugly shitboxes owned by national property firms that make everywhere feel like nowhere.
Austin does not appear to have undergone a "net population exodus", at least not one visible on any of the charts I found (I stopped after FRED).
I think you need to look at rate of change ( 1st derivative ), not net terms.
Meaning population increase slowed down relative to new housing builds. OP didn't say this, but it's what I assume.
I think the claim made used both the word "net" and "exodus" and was simply false.
Do you have a source for the claim that the population of Austin has decreased recently?
Right. What the reporter calls a "surge in supply" is an increase in "active listings", which doesn't differentiate from listings due to new construction vs listings due to people leaving.
Also, I could not find the "active listings" data in Zumper's report[1]. And then I noticed the chart with the active listing data says it was made by Brenden Tuccinardi/KPBS, so this was done by a reporter, not a Zumper data analyst. It's a bit fishy.
[1] https://www.zumper.com/rent-research/national-rent-report
San Diego also has the strange property of being on an international border!
TJ and SD are really two parts of the same metropolis - any investigation has to see how population ebbs and flows across that border, and what the housing prices did on both sides.
I suspect lower demand was more likely (although more supply never hurts).
San Diego has a ton of contractors dependent upon the federal government. I imagine the shenanigans of the current administration caused a bunch of them to pack it in and leave town.
> San Diego sits at the 11th most expensive rental market in the nation, according to the report, with the median rent for a 1-bedroom at $2,200. Median rent for 2-bedroom apartments is $2,950.
For expensive high growth markets, rents have dropped in most. Part of this is from a freezing of the labor market meaning nobody is really moving to town.
"we've shown a pretty significant increase in the number of new housing permits each year, we’re closing in on the 10,000 mark for the last two years"
Does that mean the "surge in supply" is really a surge in permits?
Funny thing about permits...
Increase in supply lowers equilibrium price? Somebody, pinch me!
That part is the obvious part. I want to know how they got all the entrenched landowners to let new builds in their neighborhoods and drive down values. The NIMBYs are usually the problem.
California passed a number of laws protecting landowners’ ability to build ADUs, and the San Diego council super-charged those:
https://calmatters.org/housing/2023/11/adu-san-diego/
Tons of San Diego houses have a ton of land thanks to the mid-20th century lawn fetish back when everyone was pretending that there was enough water so there are a lot of places where someone can turn some dead grass into as many as 5 ADUs.
If you are an owner of rental houses, I would think that it's in your interest to be able to build ADUs on those properties. Even if everyone does it and prices go down a bit you're still making a lot more per property than you were before, assuming reasonable building costs (and if building costs are not reasonable then not many owners will be building ADUs and prices won't go down).
Well, once you loosen up building codes to allow apartment buildings instead of single family homes then suddenly the developers will come with a lot of cash to buy those homes from NIMBYs. And cash is always convincing.
Unfortunately, it's not actually obvious. There are heaps of people, even and especially in the most expensive housing markets in the US, who will outright argue that supply and demand doesn't apply to housing.
I have to guess it’s along similar lines to the claim that additional road capacity leads to more congestion.
The concept of "pent up demand" seems to be incomprehensible to some.
Yeah it seems like there is a widely held belief that people are freeloaders looking for any opportunity to take something they perceive to be free, so they go do things they would not otherwise do. A much simpler explanation is that when the cost is low they do what they wanted/needed to do, and when the cost pushes the ROI too low they do without something, or find a workaround. The demand is still there, just unmet.
The problem with roads is that cars are really really inefficient and drivers don't have to pay for the road, so a driver can extract government subsidies by driving more.
You run into the same problem with free or heavily subsidized public transit. The trains were crowded in Germany when the government instated a temporary 9€ ticket for all public transit (buses, subway, tram, regional trains, etc) in all cities.
> drivers don't have to pay for the road
It is more complicated than that, for sure. I definitely pay for the roads in my city. And I pay for the mass transit in my city despite almost never using it.
It does not seem controversial that if you raise the cost for something, less people will make that choice. That does not mean that the underlying demand actually did not exist to begin with. If you made the cost zero, you would find the real demand.
Maybe renters were such a crazy high percent that despite the fact they were all wrapped up in their jobs and children vs retirees with nothing else to do in their $1M house than show up to meeting to influence the political apparatus they they still finally balanced out at the planning and zoning meetings.
California also passed a ton of laws that effectively upzoned the state in various ways. Minnesota did the same thing a few years back.
This seems like the only real path - you cannot beat out these skeezy local homeowners and landlords at the corrupt local politics game. You need statewide politicians who have political ambitions to build off of solving these problems.
plenty of renters ask for rent control instead of increasing supply. Often they make the mistake of seeing high prices for new apartments and mistakenly believe those high prices mean the rent is going up over all.
So does decrease in demand! Pinch you again.
A mainstream view on one side of the political spectrum that increase in new home supply(especially if high end) does not lower prices or reduce shortage.
> One well-worn refrain of progressive urban politics is that new, “luxury” housing will not help solve the housing shortage. A 2024 study of U.S. voters found that 30 to 40 percent believed more housing would, instead, increase prices, and another 30 percent believed it would have no effect
https://www.theatlantic.com/ideas/2026/02/housing-crisis-ric...
That's because "progressive" urban politics is generally not progressive at all and dominated by the upper middle those that benefit or think they benefits from squeezing the working class out of their neighborhoods.
Those people aren’t progressives: they’re NIMBYs who learned that certain language can make it easier to get the policies they want. We have a ton of them here in DC, and you can tell by seeing what else they support: they’ll talk about affordability to block luxury apartments, flip to pretending to be staunch environmentalists to block an affordable housing project, talk about traffic or “the poor” when protesting a bike lane before pivoting to block transit projects, etc. It seems incoherent until you look at it through the lens of whether something would add competition to their future home sale or cause the city to subsidize them driving every everywhere less.
No True Scotsman?
They are progressive (Statistically)... it's just that they are human too. Meaning they can have progressive ideology and vote for weed, pronouns, but when you touch the wallet, not so much.
You raise a fair point but I think you can draw a line between people who actually do progressive things in other areas and those who sometimes use the language but never show up for anything other than preserving the status quo.
Agreed, it's a spectrum.
Well, building luxury housing still helps, to some degree: the richest residents of the area would buy it, and they would sell their old house to someone slightly less rich, who in turn would sell their old house… At the end of this chain you get affordable housing.
Affordable housing has always been old housing. Housing is essentially a pigeon hole problem, where some pigeon holes are nice and fancy and some are older. The pigeons simply bid their way in, and the more extra holes the cheaper they are.
I think the steelman argument is that maybe you induce demand and it's a wash on housing costs as rich people move into the city or etc to use the new condos
But you do at least get more property taxes?
There is at least some truth to induced demand with new housing driving an influx of new residents, especially in cities with economic opportunity.
Just like transportation induced demand, the solution is different style of infrastructure. High capacity metros, bus lanes, and regional rail to get people out of cars and use limited transportation corridors more efficiently than single occupancy vehicles. One more lane bro doesn’t work, but adding new forms of more efficient transportation does.
New, denser housing with mid rise and high rise buildings and a mixture of unit sizes in walkable neighbourhoods with good transit access absorbs new residents and drives down housing costs for everyone. Single family sprawl doesn’t work, but density can.
We have under-built for decades, so it’s easy to misunderstand the signals. More housing gets built and prices still go up, and many people are concluding more housing just increases prices, leading to people with good intentions decrying “luxury housing”. There are plenty of nimby actors in the mix too, tossing in all sorts of misinformation and bad faith arguments, muddying the water.
The reality is areas with strong economic growth are all failing to add enough new housing and demand continues to outstrip supply, leading to higher prices. Many studies have shown even new high end housing helps manage prices, as someone rich enough upgrades, leaving their unit empty for someone else to upgrade into. That chain continues all the way down into the lower cost units, each time freeing up space someone else can afford. Large migration into a region can mess with how much prices can be affected, but studies still show even high priced new units do slow down growth in prices. Supply and demand does apply, we have just massively underestimated how far behind supply is for the demand and need to add so much more housing.
How does the induced demand argument not apply to AMI-median affordable housing as well? Demand is demand.
Well, that would mean the rich people moving in aren't hogging or bidding up existing housing stock in the city, and the cities they moved out of will have the same price lowering effect that the GP mentioned.
> and they would sell their old house
lol
in reality they just keep their "investment" and, in some cases, decide to convert their old house to an airbnb for extra passive income
There's only so much demand for airbnb, and most of those kept houses would be rented out which still improves supply.
> there's only so much demand
Yet SoCal suburbs are full of them. And it doesn't necessarily add supply, since most people seek leases longer than the maximum 90 days set by Airbnb. Unused short-term rentals offer significant tax writeoffs. The owners don't need demand, they just need the plot's assessed value to continue increasing.
It's surreal that orange site seriously thinks rich people would ever liquidate the most inflationary asset in the West.
> Yet SoCal suburbs are full of them.
According to google results there's around 10k airbnb listings in san diego, around 1% of households or maybe "less than 2%" by one article.
Even if 30% of new houses ended up causing a bad use like airbnb, all the rest would be still be significantly improving the situation. And you would not be able to balloon the airbnb supply for long until the price drops and a lot of those houses switch to normal rental.
And that's still playing into the "nobody sells a house" situation. Many people would sell houses.
> Unused short-term rentals offer significant tax writeoffs.
Losing money sucks even if you don't pay taxes on it. But what kind of writeoffs in particular?
> The owners don't need demand, they just need the plot's assessed value to continue increasing.
Which it would not be doing in a situation with significant building. A self-reinforcing supply constriction going to airbnb can't absorb that many houses. I don't think it would survive a doubling in the number of airbnb listings.
And even if the value keeps rising, not having renters loses you a lot of money. Many of those empty houses are going to turn into long-term housing.
> It's surreal that orange site seriously thinks rich people would ever liquidate the most inflationary asset in the West.
There's a lot of people in 5 million (or 4,3,2,1 million) dollar houses that cannot afford a second one.
You can make $100-200k in 'easy' profit where I live by dropping the cheapest manufactured home on a plot. If you live in a place that allows it, I don't understand why people don't do it. I literally got a ~270k house for under $100k by being willing to be the guy the develops the plot. The actual house was laughably cheap, like 60k, there is a burnt out house dressed up in new paint selling next to me for like $300,000 and someone will snatch it up shortly.
Except when it doesn't. From the same article, Seattle and Oakland had supply increase 13% and 6% respectively and both saw average rents go up. Long Beach, CA and Santa Ana, CA both had supply increase by over 10% and saw rents stay basically flat.
More supply generally will help, but it's not a silver bullet.
Maybe more recently it's up but Oakland has been a supply success story as prices diverged with SF starting around 2021. There's a chart past the fold that illustrates it well:
https://www.sfchronicle.com/realestate/article/oakland-rent-...
It's always funny when people see the law of supply and demand in effect.
Landlords in San Diego were feeling less greedy this year. Same as lithium miners between 2022-2025.
But SSD manufacturers and oil producers have been feeling really greedy this year.
Let's be clear about our terms here. The articles in the OP appear to be strictly discussing the City of San Diego. The City of San Diego is a drop in the bucket compared to the expansive San Diego County. If you're talking about being a "border town" or "metropolis" then you're not talking about the City but the County.
San Diego County includes La Jolla and points further north, as well as El Cajon and Jamul and all sorts of suburbs. It's a huge area with many disparate neighborhoods (and even 4 microclimates.)
The City of San Diego includes very undesirable neighborhoods such as most of Downtown. There are a lot of places where normal people would have a terrible time, despite still being expensive. But there are also many different parts of the County which are "bad neighborhoods" and upscale places and ethnic enclaves, etc.
Honestly, I was a little surprised that these articles are specifically referring to only the City in terms of housing supply. The vast majority of San Diegans don't even live in the city. I mean, it's not as pathological as Los Angeles and its county, but it's an important distinction that's often lost on out-of-towners.
This place sucks, don't come here.
https://x.com/HotAisle/status/2046792071521157600 (taken tonight)
I mean it’s just a sunset on some sand. You can get that all the way from Chile to Alaska, not a big deal.
I do wonder how much of this can be attributed to many people leaving biotech for better paying jobs in the AI gold rush (a.k.a packing it up and moving to SF).
More housing is always a good thing though
So the source for this (which is stated and linked in the article) is something called the Zumper National Rent Report [1]. For anyone curious, this is their methodology [2]. This seems to be a measure of active listings based on advertised prices. So it's not necessarily an indicator of if those listings close and at what price (eg in hot markets, people can offer above the listed price). But it seems reasonably well-regarded.
I'm not sure where the "19 of 20" comes from because I grabbed the data from the report into a Google Sheet and sorted and it's not #19 by 1br Y/Y, 2br Y/Y or average rent. What it shows is 1br -5.6% and 2br -7.5% Y/Y. LA was -3.6%/-2.5%.
It's hard to find a comparable city to this because there aren't actually a lot of coastal cities in the US that aren't mega-cities (eg Boston, New York, Miami, Houston).
It seems like San Diego built ~4000 new housing units in 2025 with a population of ~1.4M. For comparison, Miami seems to have added ~18,000 but it's population also exceeds 6M so is that a fair comparison?
My point here is that the direct evidence linking building new housing units to changes in rent is weak.
Not that I'm opposed to building by any means but simply blindly building more units is by itself not an answer. It depends on what you build, where you build it and whether you allow effective or actual cartels to monopolize that supply.
Take Manhattan as an extreme example. There has been a ton of building along so-called Billionaire's Row and also some pockets in the Financial District, West Chelsea, the UES and so on. A lot of this stock is the so-called ultra-luxury market. Prices for some of these new units are now exceeding $7000/sq ft.
That is going to help absolutely nobody. Ultra-wealthy non-residents will park money there and that's it. This blind assumption that it will eventually become prole housing is ludicrous.
Housing should primarily be for shelter, not a speculative asset or investment vehicle to get wealthy by denying someone else shelter.
[1]: https://www.zumper.com/rent-research/national-rent-report
[2]: https://www.zumper.com/blog/our-methodology-empowering-the-r...
Relevant metric is "New housing units per 1k existing" which is quite low in Manhattan.
For some examples, go https://constructioncoverage.com/research/cities-investing-m... , look at metros that authorized many new units in 2023, and then look at inflation-adjusted home price change from 2023-2025.
Like magic, you will find that post-inflation home value growth was low in the metros that built the most: Austin , Raleigh-Cary, Nashville, Jacksonville, Houston.
I see the "supply and demand" straw man is propped up well and often in this thread. Let's talk about the actual dynamics in play:
1) Rent-Fixing: This is widespread across the country and the actual reason why inventory increases often (commonly) do not lower prices. There are multiple tactics landlords have used to ratchet up rates without ever letting them drop. These include lease concessions that don't affect the base rent in lieu of rate drops in step with lowered demand, warehousing that artificially limits accessible supply even when new, physical units are hitting the market, and algorithmic price-fixing had allowed landlords within a region to stay in lock step without breaking rank lower. When landlords are able to use such tactics with impunity, they absolutely do warp supply-demand dynamics and allow rent rates to stay high even in the face of expanding actual inventory. For rents to decline, you have to break large landlords' ability to set their price.
2) Builder Subsidies: "Just build more and prices will drop," ignores that the incentive structures municipalities use to draw developers are an additional burden on residents. These for-profit corporations then seek to make a profit on their investment, leading to no direct meaningful inventory increase in the affordable unit range. Worse, developers often target existing affordable units for their redevelopment, destroying the very units that the new inventory is supposed to ultimately reduce demand for. In order for "build more" to drive down rents, it can't be done the way it has been, which mostly ends up being a giveaway to developers at the expense of the tax base and displaced renters.
San Diego is a special case where it seems that the expanding inventory has been driven not by corporate developers, but by the construction of ADUs, which are built by homeowners out-of-pocket, are not tax-subsidized and, in fact, increase the taxable value of property. In this way, they work almost counter to traditional development, and these factors combine with their being created and operated outside of the control of corporate landlords means that they represent new and meaningful competition to those landlords. Thus, efficiencies are sought and prices drop.
Encourage ADUs. Avoid subsidizing large developers and corporate landlords. If there is the political will, get the government directly involved in constructing subsidized owner-occupied, human-scale housing, as in Singapore and the pre-Thatcher UK. Relax zoning and build out public transit and car-free infrastructure in order to reduce the accessibility premium, as in Japan. That is how "build more" actually can work to lower rates.
What is this country's allergy with public housing? Not pursuing that feels like jumping in water with our hands tied behind our backs
Black communities were bulldozed to make way for highways for being "slums" and forced into isolated "public" housing. This only concentrated the issued of crime and poverty and moved it out of sight of richer whiter communities. This was labeled as "Urban Renewal" and passed under the Housing Act of 1949.
It's not just public housing it's all housing. Even some public housing advocates argue against housing reforms that would make it possible to build public housing!
I've been supporting an advocacy group looking to build social housing and at least half the pushback is from anti-housing "tenant advocates" that work for non-profits funded by extremely foundations with boards that are all very wealthy with multiple homes, and don't see the need for more housing. The "tenant advocates" seem to view housing similarly and only support public housing to the extent that it doesn't actually get built.
Well obviously fuck those guys, but we need to build housing people are going to actually live in
Pretty much all housing is housing that people are going to live in...
Unless you are only talking about housing for a certain type of people, and that you'll only approve housing for that type of people, otherwise no housing? That's a very common position that I disagree with strongly.
Soak the rich, let them pay for the high cost of new housing, and it benefits everyone.
For public housing, it should be for all incomes so that those with high incomes subsidize those with lower incomes, so that the public housing has support throughout all levels of society when it comes to vote for maintenance every year, so that when there's a budget cut it's all of society fighting to ensure that the public housing is maintained.
We need to break out of the idea that only some people deserve to get housing, and that we should build just for that narrow band of people. New housing is expensive, we need a lot of it, and those with money are the ones who should pay for it.
Yes, we all have a right to a decent place to live! But unless we can accept public ownership of land (and therefore housing), there's not much to iterate on and we're left with today's reality where we happily let millions live on the street for no fucking reason
The obvious reason is that to a first approximation nobody is building public housing, and so appeals to public housing, especially from owner-residents, read to housing activists as a dodge, a way to perform advocacy for housing without actually providing housing.
A subtler reason is that public housing is drastically more expensive to build than private housing. There's multifarious reasons for this, and the underlying problem is absolutely worth solving (it's one of the three big prescriptions in Abundance), but it's a bigger problem than housing. Right now, people are focused on whatever's going to bring the most units online fastest.
Is this actually true? Singapore seems to have built, well, their entire country around public housing. I can understand this being more expensive, but drastically so seems hard to believe.
Bringing more units online won't matter much if people can't afford them. Zoning (which is what I take abundance to refer to) can only do so much—we will need to attack housing as a commodity (or an asset, depending on who you listen to) in order to make a dent on the housing issues outside the upper middle class.
It's a US-specific observation.
Is there a current best practice for public housing? I remember a project here in South Australia that integrated some apartments for low-income or homelessness-risk tenants, amongst other tenancies. Idea being that it made for a melting pot rather than risk of only slum or only premium housing. But I don't think it was done at any real scale.
No. Housing is a volatile topic. My vociferous rage comes from an american perspective. But mixed-class housing is generally positive
They were historically used, at least most notoriously, for selling crack and sniper fortresses for organized gangs. Your average American envisions something like Cabrini Green when you say public housing.
Lots of people quoting basic supply and demand.
People in the year 1500 could pretty reliably tell you that a rock would fall down if you released it from a height. People would also tell you that if you threw it up and away, it would go up in an arc and fall down.
The innovation that Newtown and friends brought about was they made quantitative predictions about the rate at which the rock would fall down, or the arc it would follow - both to pretty high level of accuracy.
The point is that, of course, building more houses has a tendency to reduce rents. The question is whether reduction is -0.1% or -10% or there is an increase of +5% because some other factor was more dominant. It would be very hard for policy makers to argue against building more housing, if there was a quantitative model that predicted exact numbers for how much rent fell down given all relevant factors, and this model had been validated over and over again by prediction (not retrodiction). Rather than "rock fall down if you drop it" model that everyone keeps quoting.
We don't need quantitative models if we want the rock to fall. It might be nice to have them, but one of the great things about market economies is that we don't micromanage according to overly complex estimates, and get better results.
Zoning and homeowners are holding on to the rock with a death grip, all while saying "the rock won't fall if we let go, that's fake science, it's far more nuanced you see" as they lie through their teeth to make big profits and immiserate those who don't own land.
The quantitative model will tell you whether building housing of type A of quantity B results in more of a decrease in rent than building housing of type C of quantity D. Then you choose the policy that results in the desired decrease in rent. Otherwise, you risk wasting time in pursuing a policy that only results in a 0.1% decrease.
You do have a strong point, in that homeowners are eager to approve plans that allow for ADUs but disallow anything slightly larger. Homeowners already have housing, don't often need more of it, and like having complete control so they approve plans that allow ADUS with the knowledge that it won't account for any significant new housing, and new housing is directly against homeowners' financial interests.
But in reality, the political choice of "let's build A, or B, or C" doesn't exist to maximize the effect of housing. People overly focus on highly regulating to a specific type of housing to prevent anything from getting built.
Let people decide for their own what type of housing they want, and all of a sudden we'd have enough of it. That's the biggest fear of landlords and homeowners.
Most rent payers aren't concerned with the exact function that will describe the shape of the curve for decline in cost of rent.
They are mostly interested in "rent go down", or at least "rent not go up".
That said, there are people who have studied this. You don't need Newtonian level math to calculate elasticity. Hell, we can look at how rents rise in a constrained market and make a pretty good guess what would happen if supply increases.
There are dozens of papers that have these numbers when you search the academic databases for "rent elasticity"
Lots of places in the world have legally mandated percentage by which rent can increase for a unit per year. It might be 2% or 3%, but it is a fixed number that is fought over politically before being decided. That is the function that you are claiming rent payers don't care about. But they do, as evidenced by elected officials enforcing the number they think will get them the most votes.
That’s completely distinct from increased supply driving down rents through market mechanisms. That process is completely independent of supply and demand in open markets.
People don’t give two shits about politically determined rent caps if rents are dropping through supply increases. I’ve lived in those places you describe and that mechanism creates market distortions that paradoxically drive rent way above the market clearing price for new entrants. In any case, none of those places place restrictions on lowering rent due to competitive pressure.
Notably, though, a significant fraction of people seem to believe that building more housing will cause rents to increase. So it seems like it is still important to point to data suggesting the opposite.
Housing is a unique market, because every single product in it is unique, and prices and rents can vary quite a bit.
In a city I used to live, the city decided to revitalize a section of downtown by bringing down some old small buildings and replacing them with high rises. The resultant effect was a bloom in shops and restaurants in the area. That meant that 1km^2 area became a lot more attractive, landlords jacked up rents, and existing tenants in the other buildings in the area had to move out for people who were willing to pay 2x the rent. Of course rents probably went down elsewhere in the city to compensate.
You will never get this sort of prediction from simply supply and demand. You need to build quantitative and holistic models that make predictions based on a range of factors. Then use those to make policy.
I don't think the predominant factor causing pollies to shy away from increasing housing supply is a lack of understanding that supply decreases prices, it's a lack of political will to decrease prices.
It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.
In a city like San Francisco, relative to the status quo ante easier development is more likely to result in slower growth in home prices, not a reduction in home prices.
But that's not the reason most San Franciscans oppose development. The primary reasons are 1) they're convinced more development will raise prices, 2) they believe affordability must be mandated through price controls or subsidies (e.g. developers dedicating X% of units for below market prices), 3) they insist on bike shedding every development proposal to death, 4) they're convinced private development is inherently inequitable (only "luxury" housing is built).
Pretty much the only group of people in the city worried about housing stock increases reducing prices are developers trying to sell-off new units. But developers are repeat players, and they're generally not the ones lending support to development hurdles. Though, there is (was?) at least one long-time developer who specializes in building "affordable" housing--mostly at public expense, of course--who did aggressively lobby for development hurdles, but carefully crafted so he and only he could easily get around them.
> It's harder than you think to argue for a house price decrease when it's the singular asset that most older adults have most of their wealth tied up in.
The only thing they can exchange it for is another house or an alternate form of housing. Because you have to live somewhere.
But what I have seen is worries about social class and sharing space with new neighbors who act like they're from the next rung down on the ladder. Which isn't all that different from the usual objection to short-term rentals.
Yes, but many people use geographic arbitrage to exchange their house in a supply constrained area for a house elsewhere and enough money to never have to work again. Notably, the more you can work to restrict supply once you already are in the market, the sooner you can move to Costa Rica.
If I could lobby my government to restrict other people’s use of their property in a way that would give me enough money to create a generational wealth in exchange for moving somewhere with cheaper houses, I would be very tempted to be that asshole.
> It would be very hard for policy makers to argue against building more housing, if there was a quantitative model that predicted exact numbers for how much rent fell down given all relevant factors, and this model had been validated over and over again by prediction (not retrodiction).
Policy makers are experts at completely ignoring objective facts, why would this be different?
We don't need to know how much. We just need to know the direction, and stop caring so fucking much about rich people going underwater on their home.