3 ms·
Seems like it must depend a lot on how much pent up demand there is for housing. Add 10% to the Bay Area and it's not going to make a dent. Add 10% in Detroit
by jandrese 4y ago
Seems like it must depend a lot on how much pent up demand there is for housing. Add 10% to the Bay Area and it's not going to make a dent. Add 10% in Detroit and you just add 10% more vacant units, but probably little change in rents because they're already bottomed out. They might actually increase the average rent in this case if you build more desirable units that have a mortgage to pay off.
- jeffbee 4y agoI doubt your intuition. A 10% increase in supply in the Bay Area would radically lower rents. That would be as if we added 3 years of the whole state's construction, just to the Bay Area, with only 1/5th the state population. Or in other words, 15 years the typical recent pace of construction. In Berkeley we lost only 2% of the population but that knocked 10% off real-dollar rents.