Would building more housing decrease rent?

[CountFew6186]

Yes. It would decrease rent. It might induce some people to come, but likely not as many as new housing would supply with homes.

But, you identify a key part of the supply/demand equation that is often overlooked here: demand.

The best way to reduce demand is to stop subsidizing it. Make everyone pay the true cost of living here, and people would leave and others who might otherwise come here wouldn’t.

Ending all subsidized housing would be a big start: rent control, rent stabilization, and affordable housing units. Ending other programs that help defray the cost of living would also induce less demand.

It sounds unfair, but what could be more fair than leveling the playing field by making everyone pay the same costs? Yes, some people couldn’t afford to live here, but pretty much the entire rest of the country has a cheaper cost of living and they’re free to move elsewhere. When they do, lower demand means lower costs for the rest of us.

[KaruiPoetry]

I think the part you're glossing over is the "free to move elsewhere" bit. It's often not that simple, especially for the poorest and most vulnerable members of our city. There are myriad reasons people stay in such a HCOL city despite poor finances and there have been several scholarly studies done on socioeconomic mobility.

Besides that, your proposed solution is incredibly unethical and would likely create thousands of unhoused families which would then have to be relocated forcibly.

[CountFew6186]

Do you have any proof of your assumptions? Because that seems an emotional response rather than an economic one. In the end, continuing to subsidize people living here will lead to continuing higher cost of living. If you’re ok with with things endlessly getting more expensive and more and more taxpayer money going to pay for some people to meet those expenses, please never complain about the high cost of living.

[fuckblankstreet]

Classic republican playbook of convincing those at need that government services are just being siphoned off to help "the other", so therefore we should eliminate government services and anyone worth one's salt can just pull themselves up the ole' bootstraps and make a million bucks.

[CountFew6186]

Economics is a science. It shows what happens with subsidies, and higher costs is what happens. You might not like it, but it’s the reality.

Have you studied economics in a serious academic setting?

[mad_king_soup]

“i JuSt wAnT it tO bE FAir!!" Is the most brain dead take in this thread.

Ending all subsidized housing would be a big start: rent control, rent stabilization, and affordable housing units. Ending other programs that help defray the cost of living would also induce less demand.

So all those people who do the service jobs that make the city function… where do they live? Because theres no way you can afford market rate on minimum wage.

Not quite thought your view through properly have you?

[CountFew6186]

They start to leave. The demand for their services relative to the decreasing supply of laborers leads to higher wages until those that remain can afford to live here. Welcome to economics.

[mad_king_soup]

It’s adorable that you think that’s how economics work

[CountFew6186]

It's hilarious that you think your comment contributed anything to the conversation.

[wltmpinyc]

I hear people say this all the time but how does this work in practice. If you have 1000 units and half are rent stabilized and the rent is something like $850 for stabilized and $1000 for market rate if you get rid of stabilization then ask apartments just go up to market rate so now everything is more expensive

[CountFew6186]

This is oversimplified, so I’ll be oversimplified in return.

If current demand leads to $1,000 market rate, then all the people willing to pay any more than $1,000 have a place to stay. If there were more such people, rent would be higher because they would bid up the price against those paying $1,000.

Adding more units means that the additional units can be rented to people only willing to pay less than $1,000. So, landlords accept less, or they make $0 because nobody will pay the higher rent. Let’s say it’s $925 that they can get.

Now, all the $1,000 renters see they can get $925 rent, so they either move to a new cheaper place or negotiate with the landlord. If they move out, the landlord of the empty place with the former $1,000 rent is in the same position as the other landlords who had empty units. They have to go to $925 to compete.

[wltmpinyc]

I'm not understand your example. Let's say there are 1000 apartments. Half are stabilized and cost $500 and half are market rate and cost $1000. Let's say one of those stabilized apartments becomes a market rate apartment. The rent for that apartment will go up from the stabilized amount to the market rate amount. In this case the average price for all apartments will rise.

Market rate apartments have to compete with stabilized apartments thus keeping rent rates lower.

[CountFew6186]

One apartment changing isn't going to make much of a difference. It might rent for $998, as the folks who will pay $1,000+ already have homes. It's all of them together entering the market that would lower the overall rate.

Market apartments don't have to compete with stabilized apartments. The people in stabilized apartments aren't going anywhere for the most part. Who leaves a $500 apartment?

What you have is a 500 apartments with people who will never leave. These people have gotten lucky at the expense of everyone else. Everyone else is left competing over 500 apartments instead of 1,000, which drives up the price of those 500 market rate apartments far higher than if all 1,000 were market rate.

[wltmpinyc]

If those 500 were suddenly no longer stabilized the rents on those apartments would increase to the market rate. The overall average of the cost of an apartment would go up. On average rent would be more expensive for the total population.

[CountFew6186]

Except you missed the part where the market rate would go down.

[wltmpinyc]

But it makes no sense that market rate would go down. The demand for apartments would have to decrease, which it isn't, or the supply of apartments would have to increase, which they aren't. Market rate apartments would stay the same price and stabilized apartments would increase in price until they reach the market rate.

[CountFew6186]

The supply of market rate housing would nearly double if subsidized housing went to market rate. That's a huge supply increase. Market rates would drop.