4 ms·

Ignoring the corruption question, building housings does NOT lower rent. It’s complicated.

by the_gipsy 5y ago

llampx 5y ago
Possibly the stupidest thing I've read
tmamic 5y ago
Where did you get that from?
- moonchrome 5y ago
  I don't get why he's being downvoted - although maybe too general of a statement, I can completely see how new development in an area could actually drive rent prices up - development also affects demand - from gentrification to things like opening business and infrastructure scaling making the area more attractive. I've seen this happen in my city - there's a really renowned developer building high quality mixed residential-buisiness complexes - as soon as they started building a new site the surrounding prices went up, this happened in all of their projects I've looked into. But they are the most extreme example. I'd guess that most of the neighborhoods that are seeing active development are increasing prices faster than the rest of the market.
tfehring 5y ago
The research I've seen (e.g. [0] [1]) consistently shows a modest decrease in rent prices for existing renters when new housing is built. Are there studies showing the opposite that I'm not aware of? I understand that there are two competing effects at play (which [0] calls an amenity effect vs. a supply effect) but my impression is that empirically the latter seems to reliably outweigh the former. [0] https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-Housing-Units-in-Your-Backyard-Raise-Your-Rents-Xiaodi-Li.pdf https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-... [1] https://doi.org/10.1162/rest_a_01055 https://doi.org/10.1162/rest_a_01055
- the_gipsy 5y ago
  I can’t recall the article I read about it - sorry. It probably didn’t cite thorough studies though. It took into account the fact that higher population increases wages (opportunity), which would rise rents. Similar to amenity effect, but iirc it applies to the city as a whole, not just the neighbourhood.
internet2000 5y ago
Yes it does

Ignoring the corruption question, building housings does NOT lower rent. It’s complicated.

llampx 5y ago

Possibly the stupidest thing I've read

tmamic 5y ago

Where did you get that from?

moonchrome 5y ago
I don't get why he's being downvoted - although maybe too general of a statement, I can completely see how new development in an area could actually drive rent prices up - development also affects demand - from gentrification to things like opening business and infrastructure scaling making the area more attractive. I've seen this happen in my city - there's a really renowned developer building high quality mixed residential-buisiness complexes - as soon as they started building a new site the surrounding prices went up, this happened in all of their projects I've looked into. But they are the most extreme example. I'd guess that most of the neighborhoods that are seeing active development are increasing prices faster than the rest of the market.

tfehring 5y ago

The research I've seen (e.g. [0] [1]) consistently shows a modest decrease in rent prices for existing renters when new housing is built. Are there studies showing the opposite that I'm not aware of? I understand that there are two competing effects at play (which [0] calls an amenity effect vs. a supply effect) but my impression is that empirically the latter seems to reliably outweigh the former. [0] https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-Housing-Units-in-Your-Backyard-Raise-Your-Rents-Xiaodi-Li.pdf https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-... [1] https://doi.org/10.1162/rest_a_01055 https://doi.org/10.1162/rest_a_01055

the_gipsy 5y ago
I can’t recall the article I read about it - sorry. It probably didn’t cite thorough studies though. It took into account the fact that higher population increases wages (opportunity), which would rise rents. Similar to amenity effect, but iirc it applies to the city as a whole, not just the neighbourhood.

internet2000 5y ago

Yes it does