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?!?
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.
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 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.
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.
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.
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.
... And that's why nothing gets done.
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.
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.
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.
They’d like be building at 1.5 to 2 times what private does.
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.
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.
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.
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?
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).
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.
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.
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.
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...
In any case, gentrification, infamously kicked thousands of families out of projects, subsidized housing, and regular rentals, replacing them with... definitely not affordable housing. Rent has only gone up. And unless you're a builder, the goal is not building, it's only a means to the end of putting people in affordable homes. If building isn't doing that, it's a policy failure, and other avenues need to be pursued.
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?
simply ask the people on the vested side: "why do you want rents to stay high?" and stand back
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?
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.
Land definitely needs to be taxed, but not without the zoning changes first to allow more to be built on less.
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.
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".
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.
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?)
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.
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.
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.
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.
Funny how when you hit the breaks on pupulation growth house prices also freeze.
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.
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.
>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...
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.
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...
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.
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.
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).
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.
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'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.
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.
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 everywhere built more housing do you think the price of housing would go up? Where are these people bringing up housing prices coming from?
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).
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.
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.
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).
https://www.nytimes.com/2026/04/17/climate/san-diego-water-s...
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.
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.
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.
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.
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).
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".
You don't need indefinite growth. People generally want to live in a few cities; e.g. they don't really want to live in Toledo, they want to live in San Deigo. So you just have to let people live where they want to live, not where they have to lvie.
> 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".
That has literally never happened before and I don't see how it will happen first in San Diego. Mega cities get more expensive, not cheaper, as they grow, since the concentration of human capital and jobs make it even more valuable to live there.
The only way that general idea fails is if the demand concentrates so strongly into a couple megacities that we don't even have 10-20 non-obsolete cities left. That seems unlikely to me.
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