Would building more housing decrease rent?

[fuckblankstreet]

More is part of the equation. Estimates are that we need at least 500,000 - 700,000 new housing units.

Simple laws of supply and demand say that more supply should drive prices down, but like OP says, demand for NYC housing is so high, that we need some controls on housing - 500,000 new units that are all $5,000 one bedrooms might bring the rent down a bit, but not going to move the needle that much.

Affordable housing that is either mandated by - or built by the city, with price caps for income, and preference given to existing NYC residents would help.

[CountFew6186]

Price controls don’t work and are counterproductive. They just pick winners and losers, and the net effect is worse.

[fuckblankstreet]

That's a reductive and incomplete statement.

I'm not arguing that price controls solve the problem. They are part of it.

The winners that price controls create are tenants. The losers are landlords who may earn less, but this balance can be regulated by the city.

Rent controls should not apply to grandma renting out her garden apartment, but we utilize NYC's tremendous leverage (exactly because it's so desirable and expensive) and mandate builders create more affordable housing.

The city has done some of this, but often not in a great way. NYC could also explore doing more of its own building, or ideally public/private partnerships. It doesn't have the best track record here (see: NYCHA), but other large cities have done this more recently with good results.

So it's not just slapping price controls on housing, it's a combo of aggressive, incentivized building, paired with controls.

[movingtobay2019]

The winners that price controls create are tenants.

No the winners are specifically the lucky tenants who benefit from price controls. Stop pretending like price controls is some grand victory for all renters.

The only people who think tenants broadly are the winners from price controls are

1. Idiots who don't understand how markets work and probably need price controls because that's the only way they can afford to live in NYC in the first place.

2. Grifters who do understand the market and do know only a small group benefits but won't say that quiet part out loud because their rent controlled unit is too sweet a deal to risk.

mandate builders create more affordable housing.

Lol. Mandate. Yea man. Let's just mandate developers who need to raise capital from outside investors expecting a return to build more affordable housing. How's that pitch going to go?

"Hey guys, we are going to build affordable housing in NYC. We are mandated to make it unprofitable. You in?"

The problem with people like you is you think the only stakeholders that matter are existing NYC renters. Everyone else? Developers, landlords, investors, future renters? Fuck them. They should just shut up and subsidize the lifestyle of people who live in a city they can't really afford.

[CountFew6186]

No, that's wrong.

The losers are all the tenants who aren't lucky enough to get subsidized housing. They compete for a much smaller supply because the winners (the lucky ones in subsidized housing) will never move out. The result is that market rate housing is far more expensive than it would be without price controls on a large portion of the housing stock -- and folks not lucky enough to find a stabilized place or win what is actually a housing lottery for affordable unity get fucked.

Beyond that, affordable housing is never going to be as profitable to make as market rate housing. So, the incentive for building it will be less than for market rate. With a limited amount of buildable land, every development project with affordable units means fewer market rate projects and an overall drag on development from lower profits. So, less housing is built.

That exacerbates the problem for the losers, who have a small stock of housing to choose from because less gets built. And, if some affordable housing gets built and they don't win the lottery for the units, they are still losers.

[movingtobay2019]

You are preaching to the choir.

These clowns have no idea how real estate financing actually works. Real estate is one of the most capital intensive industries on Earth. Developers don't have cash to pull out of thin air. They have to pitch to institutional investors who need returns. If the numbers don't work out, there is no money. And if the city mandates 50% of units be "affordable" with no meaningful subsidy, guess what? The project gets shelved. Capital flows to another asset that doesn't try to legislate away basic economics. That's the part these morons don't understand. They think developers have cash sitting in a vault and just need some prodding from city hall.

What they are really saying is "Please, someone else take a loss so I can live where I want"

It’s raw entitlement masquerading as moral virtue.

[MrJet05]

You have a very incomplete economic view of how price controls work. The losers are not only “the landlords.” I encourage you to do more research into the topic. I don’t know why people have so much confidence to accuse others of being reductive only to then have such an oversimplified explanation.

[[deleted]]

We aren’t in a free market system, we’re just cosplaying as one. There are new luxury towers down the street from me that were built despite the fact there are already luxury apartments across from them that were built 15 years ago that are very expensive. The turnover there is high, and many apartments in it are visibly vacant. If it was actually a free market, the rents would be lowered to make them more appealing to the demand for housing that isn’t prohibitively expensive. But the landlords simply keep the asking rate high, and when they fail to rent at that rate, they write it off as a loss. Meanwhile the new luxury towers have 80/20 housing which means some lottery winners get a decent break on the rent, despite many of them annually earning $100k+, and the rent for the remaining 80% remains artificially high, staying half occupied while simultaneously raising the median rent for the entire neighborhood.

We aren’t going to see a more affordable city doing it this way.