Contrary to the basic laws of supply/demand housing prices tend to increase as quantity of housing increases. To see this problem look at current and historica

Contrary to the basic laws of supply/demand housing prices tend to increase as quantity of housing increases. To see this problem look at current and historical data only. Do not trend for the future. The reason why this can occur contrary to the most basic principle of economics is because land is a fixed resource regardless of the frequency of housing upon it. Peoples’ perceptions of fixed resources doesn’t change regardless of frequency variations upon them resulting in trends that defy both pricing and availability as suggested by supply/demand. The problem this causes is bad policy. There is always a perception of housing shortages. Sometimes there are housing shortages but far more often there are plenty of houses that new incumbents cannot afford. That is an availability problem but not a shortage. Building more housing to directly address that concern widens the gap between shortage and availability. The speed with which that housing is built is a direct correlation to the rate of value increase of existing homes. That increased value drives up property taxes. This change is immediately felt by property owners. For rental properties this change results in a short term loss of capital and a lagging price hike to the renters to make up the difference. That delayed variance of price increase increases demand of ownership without addressing availability. Here is my real world example: I live in one of the fastest growing areas of the US. In 1990 my city was less than 450,000 people. The city was considered large but not amongst the largest in the US by a long shot. In 2010 it was around 750,000 and the 2019 estimate put it at about 910,000 making it the 13th largest city in the US. I bought my house as a foreclosure after the crash in late 2009 (2800sqft) for 129k retail before fees and taxes. In the past few years they projected housing shortages so there is a shift from building hundreds of homes per year to apartments. As a result, last year alone, houses have increased in value 50%. More than month ago the price of lumber dramatically increased and rapid inflation become apparent. In the past month the value of my house has increased by more than 10%. More than hour away my mom’s house has increased by nearly 11% over just the past month and they aren’t even doing any construction there. EDIT I am curious to see any real world cases where housing prices went down as a result of building more housing.