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?!?
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.
>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.
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.
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".
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.
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.
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.
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.
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!)
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.
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.
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.
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.
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.
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.
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.
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]
> 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.
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:
> 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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
> 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?!?
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.
>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.
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.
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?)
Land != Housing.
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.
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.
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.
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.
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!)
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.
Zoning belongs to all the voters in the municipality, not just the homeowners.
I have a bridge to sell you
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.
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.
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.
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.
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?
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.
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!
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.
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...
> 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.
Austin’s Surge of New Housing Construction Drove Down Rents: https://news.ycombinator.com/item?id=47433058
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.
> 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.
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
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).
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
"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).
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.
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.
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.
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.
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.
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.
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.
This place sucks, don't come here.
https://x.com/HotAisle/status/2046792071521157600 (taken tonight)
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.
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 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.
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.
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.
> 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.