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?
San Diego rents declined following surge in supply
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Re: San Diego rents declined following surge in supply
#22What is this country's allergy with public housing? Not pursuing that feels like jumping in water with our hands tied behind our backs
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.
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Re: San Diego rents declined following surge in supply
#23But 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...
Re: San Diego rents declined following surge in supply
#24Re: San Diego rents declined following surge in supply
#25Should note that "top US markets" really means "most expensive US markets", not for example the largest by population.
It's actually a combination of both, leaving out more expensive smaller markets.
Re: San Diego rents declined following surge in supply
#26What 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.
Re: San Diego rents declined following surge in supply
#27Increase 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.
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.
Re: San Diego rents declined following surge in supply
#28Lots 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.
Re: San Diego rents declined following surge in supply
#29Earlier quoted context omitted.
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 belie…
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.
Re: San Diego rents declined following surge in supply
#30Earlier quoted context omitted.
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.
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?
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.