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 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.)
If demand for cars skyrockets then you (eventually) get more cars at the same price coz the manufacturer can just make more.
If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
So no, supply and demand doesnt really work for land the way it works for everything else.
Land needs to be taxed a lot to create enough supply and in California prop 13 quite deliberately did the precise opposite of that.
Zoning that reduces buildable footprint and/or height artificially increases demand for land. If the only way to build a home is to buy a 9000 sqft lot, then my demand for land is 9000 sqft. If you can build 18 homes on that same lot, my demand for land is 450 sqft.
Land definitely needs to be taxed, but not without the zoning changes first to allow more to be built on less.
Zoning is the hobby horse of property developers. They're endlessly frustrated by the way zoning prevents them from building the most profitable construction - no matter whether there is a good or a bad reason for it (sometimes it's good sometimes it's not).
This inspires a lobbying and public outreach effort to try and convince people that relaxing zoning rules will fix everything.
As with many corporate lobbied for campaigns, it may be a good idea in general (e.g. net neutrality) or it may not be but it's definitely never the panacea it's sold as by the well funded PR campaign.
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 it's not the most significant cause of our housing affordability crisis, you'd have to find some better proof than "developers like it and developers are bad people".
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.
Your statement is based on the assumption that these people believe what they say. They don't. They simply hope other people might believe what they say.
For the same reason that NIMBYs care so much about urban trees or spotted owls. They don't actually give a shit about them, they just are willing to say or do anything to sabotage the process of increasing housing supply.
I'm as big a YIMBY as you'll find, and urban trees are really important to making a city a nice place to live. There's no contradiction to those positions - just, you know, build more housing and plant more trees. (Spotted owls, of course, have nothing to do with urbanism, so I don't know how they got dragged in here.)
Being a NIMBY I want to live in the neighbourhood I bought a house in, not the one someone who can leave with a months notice feels like turning it into.
Being a homeowner, you get a title to your lot, not your entire neighborhood. You have no legal claim on your neighbor's home. If you want a legal claim on your neighbor's home, join an HOA. Or just buy it.
I'd be willing to bet you every last dollar on the planet that if you read your deed, you will find zero claims to any particular zoning. Zoning is not a transferable property right. It can be changed for any reason at any time.
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.
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.
> 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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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?!?
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.
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.)
If demand for cars skyrockets then you (eventually) get more cars at the same price coz the manufacturer can just make more.
If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
So no, supply and demand doesnt really work for land the way it works for everything else.
Land needs to be taxed a lot to create enough supply and in California prop 13 quite deliberately did the precise opposite of that.
Zoning that reduces buildable footprint and/or height artificially increases demand for land. If the only way to build a home is to buy a 9000 sqft lot, then my demand for land is 9000 sqft. If you can build 18 homes on that same lot, my demand for land is 450 sqft.
Land definitely needs to be taxed, but not without the zoning changes first to allow more to be built on less.
Zoning is the hobby horse of property developers. They're endlessly frustrated by the way zoning prevents them from building the most profitable construction - no matter whether there is a good or a bad reason for it (sometimes it's good sometimes it's not).
This inspires a lobbying and public outreach effort to try and convince people that relaxing zoning rules will fix everything.
As with many corporate lobbied for campaigns, it may be a good idea in general (e.g. net neutrality) or it may not be but it's definitely never the panacea it's sold as by the well funded PR campaign.
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 it's not the most significant cause of our housing affordability crisis, you'd have to find some better proof than "developers like it and developers are bad people".
"It won't fix everything" doesn't seem like much of an argument against it, though?
Land != Housing.
If the alleged people actually said this, and they wanted to "maintain high prices", then why would they oppose more building? If they believed "supply and demand don't work at all", then more supply wouldn't hurt their goal of maintaining high prices.
A former trustee in the inner-ring suburb in which I live owns and manages rental housing throughout the municipality and is a vocal opponent of building new housing, and of the argument that supply and demand functions in the housing market. I could screenshot him for you, but you have no idea who he is, so: just take my word for it, these aren't "alleged" people. They're a major force in local politics around the country, which is where this fight is primarily being fought.
Your statement is based on the assumption that these people believe what they say. They don't. They simply hope other people might believe what they say.
For the same reason that NIMBYs care so much about urban trees or spotted owls. They don't actually give a shit about them, they just are willing to say or do anything to sabotage the process of increasing housing supply.
I'm as big a YIMBY as you'll find, and urban trees are really important to making a city a nice place to live. There's no contradiction to those positions - just, you know, build more housing and plant more trees. (Spotted owls, of course, have nothing to do with urbanism, so I don't know how they got dragged in here.)
Being a NIMBY I want to live in the neighbourhood I bought a house in, not the one someone who can leave with a months notice feels like turning it into.
Being a homeowner, you get a title to your lot, not your entire neighborhood. You have no legal claim on your neighbor's home. If you want a legal claim on your neighbor's home, join an HOA. Or just buy it.
You do. It's called zoning.
I'd be willing to bet you every last dollar on the planet that if you read your deed, you will find zero claims to any particular zoning. Zoning is not a transferable property right. It can be changed for any reason at any time.
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).
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.
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.
No, this is a false belief known as supply skepticism: https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=supp...
Supply increased, rents declined.
Building the house is the easiest part of building a house.
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.
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.
Austin’s Surge of New Housing Construction Drove Down Rents: https://news.ycombinator.com/item?id=47433058
> San Francisco led the nation in annual rent growth this month, with both one and two-bedroom prices hitting new all-time highs, marking the highest levels in over a decade of Zumper data. One-bedroom rent climbed 18.4% to $3,790, surpassing its previous peak of $3,720 set in June 2019, while two-bedrooms rose 22.6% to $5,270, exceeding the prior high of $5,120 recorded in September 2025.
From the Zumper report. 22% gain on SF 2B is just insane to me.
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
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
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?
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 really greedy this year.
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.
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?
How does the induced demand argument not apply to AMI-median affordable housing as well? Demand is demand.
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.
> 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
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.
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 relatively small in Manhattan.
For example, 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.
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
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.
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.
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.