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> more supply brings down rents People say that on here all the time, but I have never seen that happen. Do you have an example where increased housing supply

> more supply brings down rents People say that on here all the time, but I have never seen that happen. Do you have an example where increased housing supply lowered prices aside from a natural or market disaster? Maybe, Detroit where people simply abandoned their homes with no intent to sell.

eloff 5y ago
That's microeconomics 101, so it's theoretically sound. Is there some effect in real life that prevents it from working the way the theory predicts? I don't think so. I would put the burden of proof on you, if you want to go against a solid theory. It seems self evident that more housing supply means houses stay on the market longer (there is lots of evidence for that) and that means sellers have more incentives to lower the price to get a quicker sale (lots of evidence for that too.) Look for historical real estate inventory reports that include prices and you should see the effect when time on market increases. It's important to note that prices would only fall if the change in supply overwhelmed the change in demand. In cities like Vancouver the demand is increasing at such a rate that increased supply only means prices don't rise as much as they would have otherwise. Time on market is always short. There was a brief dip in prices early in the pandemic and then things compensated back in the other direction.
- austincheney 5y ago
  Right, but do you have any historic examples? I see none.
  - eloff 5y ago
    That's because you didn't look.
    - austincheney 5y ago
      You didn’t supply any for me to look at. Is this a child’s imagination game? Guessing at some 9th grade economics theory aside, what does the actual data say? Ignoring data like this is the only reason I can think of why people are willing to pay 10x more for a house of half the size that I paid.
      - eloff 5y ago
        Burden of proof is you. It's not my job to do your research for you. You asked the question, challenging accepted theory, look up the answer.
        austincheney 5y ago
        What proof? I asked for examples. You replied with a red herring. I asked for examples again and then you got confused.
  - ch4s3 5y ago
    The whole cloth construction of suburbia after WWII in the US. It opened ownership to a class of people who never had access prior.
jlmorton 5y ago
We just ran a massive experiment, called Covid-19, which caused about 10% of San Francisco residents to leave the city. This is not quite the same thing as an immediate increase in supply, but instead a large drop in demand. The net result is the exact same thing: a large increase in the vacancy rate, which resulted in a rapid and dramatic decrease in median rents.
- austincheney 5y ago
  How much of a decrease on average?
  - compiler-guy 5y ago
    https://www.sfweekly.com/news/what-happens-to-rents-after-the-vaccine/ https://www.sfweekly.com/news/what-happens-to-rents-after-th... Has the decrease at about 22% at one point. Lowest rents since 2013. They seem to have gone back up somewhat since, but that is a big adjustment and reflects excess supply.
    - austincheney 5y ago
      That’s rents. What is the change of ownership value?
  - ruggeri 5y ago
    35% per bloomberg. https://www.bloomberg.com/news/articles/2020-12-08/san-francisco-apartment-rents-drop-35-as-tech-embraces-remote-work-during-covid https://www.bloomberg.com/news/articles/2020-12-08/san-franc...
- koolba 5y ago
  It’s a terrible example though as the people with the most liquid financial situation are the ones that left. The ones that remained can’t even afford to rent they U-Haul to get out of Dodge. They’re stuck treading water and at best will get Newsom to buy their vote^W^W^Wpay their back rent.
arcticbull 5y ago
Japan is the classical example where they have national zoning rules permitting residential development in each zone. You can get a place in downtown Tokyo for like $300K USD. [1] > While the cost of housing is climbing in many global cities, the average middle-class family in Tokyo can still afford to buy a new, single-family detached home for $300,000. That’s right. The typical Tokyo starter home is a brand new three-bedroom. Their national zoning rules allow supply to meet demand without city-level meddling. Houses there sell for roughly the cost of construction. The reason housing is so nuts in SF is because the city added half as many new houses as required to meet demand over the last say 30 years. [2] [1] https://archive.curbed.com/2017/2/3/14496248/tokyo-real-estate-affordable-homes https://archive.curbed.com/2017/2/3/14496248/tokyo-real-esta... [2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
- Clewza313 5y ago
  However, that Tokyo 3BR is much smaller than anything you'd find in the US. The average house (not apartment) size in Tokyo is 91 sqm, or under 1000 sqft.
  - arcticbull 5y ago
    That sounds, fwiw, roughly in line with SF or NY 3br apartments. [1] By the way, that's actually part of the value proposition. New houses in the US are twice as big as they were in the 1970s - while costing the same per square foot on an inflation adjusted basis. This means 3br houses are 2x as expensive now as they were back then and is part of the reason folks are priced out of the market entirely. This is also a zoning issue. We need small 3br houses and apartments. That doesn't mean we can't also have large 3br houses. [1] https://www.zillow.com/homedetails/139-Steiner-St-3-San-Francisco-CA-94117/114317341_zpid/ https://www.zillow.com/homedetails/139-Steiner-St-3-San-Fran...
- filmfact 5y ago
  The 300k in the article is the size of the loan, not the cost of a typical house.
CryptoPunk 5y ago
Multiple examples provided in this article: https://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-affordable-housing/ https://www.sightline.org/2017/09/21/yes-you-can-build-your-...

eloff 5y ago

That's microeconomics 101, so it's theoretically sound. Is there some effect in real life that prevents it from working the way the theory predicts? I don't think so. I would put the burden of proof on you, if you want to go against a solid theory. It seems self evident that more housing supply means houses stay on the market longer (there is lots of evidence for that) and that means sellers have more incentives to lower the price to get a quicker sale (lots of evidence for that too.) Look for historical real estate inventory reports that include prices and you should see the effect when time on market increases. It's important to note that prices would only fall if the change in supply overwhelmed the change in demand. In cities like Vancouver the demand is increasing at such a rate that increased supply only means prices don't rise as much as they would have otherwise. Time on market is always short. There was a brief dip in prices early in the pandemic and then things compensated back in the other direction.

austincheney 5y ago
Right, but do you have any historic examples? I see none.
- eloff 5y ago
  That's because you didn't look.
  - austincheney 5y ago
    You didn’t supply any for me to look at. Is this a child’s imagination game? Guessing at some 9th grade economics theory aside, what does the actual data say? Ignoring data like this is the only reason I can think of why people are willing to pay 10x more for a house of half the size that I paid.
    - eloff 5y ago
      Burden of proof is you. It's not my job to do your research for you. You asked the question, challenging accepted theory, look up the answer.
      - austincheney 5y ago
        What proof? I asked for examples. You replied with a red herring. I asked for examples again and then you got confused.
- ch4s3 5y ago
  The whole cloth construction of suburbia after WWII in the US. It opened ownership to a class of people who never had access prior.

jlmorton 5y ago

We just ran a massive experiment, called Covid-19, which caused about 10% of San Francisco residents to leave the city. This is not quite the same thing as an immediate increase in supply, but instead a large drop in demand. The net result is the exact same thing: a large increase in the vacancy rate, which resulted in a rapid and dramatic decrease in median rents.

austincheney 5y ago
How much of a decrease on average?
- compiler-guy 5y ago
  https://www.sfweekly.com/news/what-happens-to-rents-after-the-vaccine/ https://www.sfweekly.com/news/what-happens-to-rents-after-th... Has the decrease at about 22% at one point. Lowest rents since 2013. They seem to have gone back up somewhat since, but that is a big adjustment and reflects excess supply.
  - austincheney 5y ago
    That’s rents. What is the change of ownership value?
- ruggeri 5y ago
  35% per bloomberg. https://www.bloomberg.com/news/articles/2020-12-08/san-francisco-apartment-rents-drop-35-as-tech-embraces-remote-work-during-covid https://www.bloomberg.com/news/articles/2020-12-08/san-franc...
koolba 5y ago
It’s a terrible example though as the people with the most liquid financial situation are the ones that left. The ones that remained can’t even afford to rent they U-Haul to get out of Dodge. They’re stuck treading water and at best will get Newsom to buy their vote^W^W^Wpay their back rent.

arcticbull 5y ago

Japan is the classical example where they have national zoning rules permitting residential development in each zone. You can get a place in downtown Tokyo for like $300K USD. [1] > While the cost of housing is climbing in many global cities, the average middle-class family in Tokyo can still afford to buy a new, single-family detached home for $300,000. That’s right. The typical Tokyo starter home is a brand new three-bedroom. Their national zoning rules allow supply to meet demand without city-level meddling. Houses there sell for roughly the cost of construction. The reason housing is so nuts in SF is because the city added half as many new houses as required to meet demand over the last say 30 years. [2] [1] https://archive.curbed.com/2017/2/3/14496248/tokyo-real-estate-affordable-homes https://archive.curbed.com/2017/2/3/14496248/tokyo-real-esta... [2] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage https://en.wikipedia.org/wiki/San_Francisco_housing_shortage

Clewza313 5y ago
However, that Tokyo 3BR is much smaller than anything you'd find in the US. The average house (not apartment) size in Tokyo is 91 sqm, or under 1000 sqft.
- arcticbull 5y ago
  That sounds, fwiw, roughly in line with SF or NY 3br apartments. [1] By the way, that's actually part of the value proposition. New houses in the US are twice as big as they were in the 1970s - while costing the same per square foot on an inflation adjusted basis. This means 3br houses are 2x as expensive now as they were back then and is part of the reason folks are priced out of the market entirely. This is also a zoning issue. We need small 3br houses and apartments. That doesn't mean we can't also have large 3br houses. [1] https://www.zillow.com/homedetails/139-Steiner-St-3-San-Francisco-CA-94117/114317341_zpid/ https://www.zillow.com/homedetails/139-Steiner-St-3-San-Fran...
filmfact 5y ago
The 300k in the article is the size of the loan, not the cost of a typical house.

CryptoPunk 5y ago

Multiple examples provided in this article: https://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-affordable-housing/ https://www.sightline.org/2017/09/21/yes-you-can-build-your-...