Yes. It’s opposite of what one would do to make housing affordable. Unaffordable housing, especially in cities, is a huge and regressive drag on the economy.
Housing is unaffordable primarily due to parochial land-use restrictions, as Matt Yglesias explains in The Rent Is Too Damn High (http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp...) and I explain here: http://jakeseliger.com/2015/09/24/do-millennials-have-a-futu....
If we want cheaper housing, all we have to do is legalizing the building of it.
There are similar developments of 100s of houses, which equally ridiculous prices. I only see the existing house prices going up, not down.
I wish it was that simple. But experience disproves this theory. It's like saying "if you want cheaper cars, build more Lamborghini's".
For instance, the article you link to complains about Seattle being unaffordable. Which is ironic because Seattle is building apartments like crazy. Something like 8,000 new apartments opened last year, and another 11,000 new apartments are scheduled for this year.
If "housing gets cheaper when you legalize building it", then why are the cities that are building new housing never becoming any cheaper?
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Even in my tiny midwest town, they're building tons of new urban-ish apartments. And the rent in those units is always $1,000 over the average for the area. It's sending the entire towns rents up (even for ancient, crummy buildings).
Most people prefer urban areas. For every one new apartment built downtown, three new households decide they want to live there. You can't outbuild demand, because the act of building increases the demand.
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I'm not suggesting we stop building -- we need the housing, we should be building up. But it's clear to me that building new housing alone is not enough to help with affordability in any way.
>Even in my tiny midwest town, they're building tons of new urban-ish apartments. And the rent in those units is always $1,000 over the average for the area. It's sending the entire towns rents up (even for ancient, crummy buildings).
I'm not sure the market works that way... These new apartments are more pricy presumably because they are more desirable; new construction usually is. In 30 years, they will be back with the rest of the rates. How do these new apartments increase the rent of the other apartments? Why can the land lords of the crummy apartments charge higher rents? Is it because there's not enough apartments or is it because they are behaving in anti-competitive ways?
There may be some macroeconomic ways to get back to more affordable housing without building, but they all involve devaluing current housing in some way.