Letter: Build. More. Housing.

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Regarding the Jan. 8 Business article, “Landlords are accused of colluding to raise rents. See where”:

Blaming the use of pricing software for high housing costs as a scapegoat for housing affordability challenges might be tempting. But it distracts from the root cause: a systemic shortage of housing across the country, which is the result of decades of government inaction. This national affordable housing shortage is well documented. The basic rules of supply and demand apply here: Prices increase as demand increases because of the shortage.

There is also proof that, as more supply is added, price increases slow, stop and even slip into decline. For example, and as The Post’s article noted, rent in Austin went from growing 3.4 percent year over year in 2018 to falling 3.5 percent in 2024 as housing construction surged. Ironically, according to the article, Austin—where rent growth is on a downward trajectory—is the market with the highest concentration of pricing-software use. As the Urban Institute succinctly noted in a new research report, “Home prices and rents are primarily determined by the supply and demand for housing units and by changes to that supply and demand.”

We agree that there is an acute housing affordability crisis in the United States. Millions of American renters are unable to afford rent, and even more renters are cost-burdened. But prices do often go down in areas where there are significant numbers of new rental housing communities, even where pricing software is used. Aggregated rent data at a variety of geographic levels helps housing providers respond to the market in a timely fashion and reduce rental housing prices in real time when supply and market conditions dictate. This, in turn, helps renters access available housing more quickly. In fact, the federal government has long used rent-data aggregation to set rents for the Section 8 program that distributes more than $32 billion annually.

It is also critical to understand that the use of pricing software collects data but does not set rents—market conditions do. When housing supply goes up, housing costs go down. If we want to solve the housing crisis, there is one effective answer: Demand that policymakers enact laws and regulations that will help us build the housing America needs.

Sharon Wilson Geno is president of the National Multifamily Housing Council.

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11 comments

  1. Sadly, here in Davis this community dithered with downtown plans and Measure J votes while the low interest rate window was open for over a decade. Now that window is closed, interest rates are up as are labor and material costs. These construction cost increases make it harder for projects to make economic sense for investors.

  2. First: There are more vacant homes than homeless, nationwide. “Build more housing” is baloney. The Feds could build affordable housing, but Nixon stopped that in the 70s, and Reagan cut HUD’s affordable housing budget for rent subsidies by 75% as he was reducing taxes on the wealthy–and, with his successor raising payroll taxes eightfold. The homeless epidemic is **by design**!

    “The basic rules of supply and demand apply here” assumes there are such rules. They do not exist. Price equilibrium can be in multiple places (proved mathematically by Sonnenschein, Mantel and Debreu in the 1970s (https://en.wikipedia.org/wiki/Sonnenschein%E2%80%93Mantel%E2%80%93Debreu_theorem). Naturally, being good economic “scientists” they ignored their own conclusion. Economics is bunk, through and through (see Steve Keen’s “Debunking Economics: The Naked Emperor Dethroned”…and while conventional economists did not predict the subprime/derivatives meltdown, Keen did.)

    We’ll see a lot more “drill baby drill” and “build baby build” cheerleading that ignores the current vacant housing surplus–San Francisco has five times its homeless population in vacant homes–and the bankruptcy of the eighteenth century economics that says supply and demand determine prices.

    The basis of these draconian public policies is a concept called “labor discipline.” Labor discipline sends the message that you had better take whatever crappy job is on offer or suffer the indignities of poverty (and what’s free even to poor people is pretty crappy) even homelessness and starvation. And…if you rebel, we’ll put you in a cage. The US currently incarcerates at five times the world’s per-capita average, seven times more than Canada or France. Yet this egregious incarceration is ostensibly to prevent crime, but crime in France and Canada is actually lower than in the US. It’s labor discipline, not crime prevention.

  3. Meanwhile, in San Francisco:

    “So, we were shocked when saw the results of a national survey measuring the amount of housing available against the amount of housing needed. The results showed the Bay Area was the top region in the country for improving its supply shortage relative to demand.”

    “The improvement we were seeing was not due to increased homebuilding. With rare exceptions, Bay Area housing production has flatlined over the past few years; San Francisco hit a 12-year low on production in 2024.”

    https://www.sfchronicle.com/opinion/openforum/article/sf-bay-area-housing-shortage-20038431.php

    (But if you look at the way the rest of this referenced article is written, you’ll see that the author is “not happy” with the reason that the so-called housing shortage is lessening. That’s because YIMBYs aren’t actually interested in that issue – they’re only interested in increasing supply, not reducing demand. And there’s a reason for that as well – it has to do with the financial interests of their underlying support.)

  4. REVISED

    What about when these vacant homes are 1) Often not where people choose to locate (including to areas well outside their economic reach) ? ; and 2) The vacancies are privately owned and not under the control of an entity that can match a ‘homeless’ person to a vacancy; 3) If not economics, who decides who gets the ‘nice’ places and who gets the ‘trashed’ places; and 4) Who is responsible when a ‘homeless’ person trashes a ‘nice’ place they were assigned to and turns it into a ‘trashed’ place?

    1. Note: this is a response to the “Adam Eran” comment of 8:57am. Apparently you can’t add a comment below a comment that has not yet been approved by the moderator.

      1. The big question isn’t about the economics or finance of housing the homeless, it’s about whether we have the available resources. Governments and public policy makers generally have already decided the financing isn’t possible, never mind whether the homes are too expensive.

        This contradicts the federal government’s ability to mint money. For a monetary sovereign like the US, the statement “We’re out of money” is a lie. Most dollars are electronic entries in Federal Reserve accounts, so they’re not even printed. A technician sits at a special computer terminal and types “1” and he’s made a dollar. Add three zeroes, and he’s made a thousand, three more, a million…etc. We’ll run out of dollars when the Bureau of Weights and Measures runs out of inches: never.

        Never mind the waste in the military budget, all those vacant homes mean we have the resources. Here’s something no one said, ever: “The Japanese just attacked Pearl Harbor, but we’re a little low on cash, so I guess we’ll not respond.” During WWII, the government took over 50% of the US economy. Incidentally, the “Green New Deal” would only consume 5% of the economy.

        Unfortunately, most people don’t know “tax and spend” is backwards. Where would taxpayers get the dollars to pay those taxes if the monopoly provider of dollars–government–didn’t spend them first? So it’s not “tax & spend”…it can’t be. It’s “spend first, then retrieve some dollars in taxes.” Tax revenues do not provision federal programs because the spending logically precedes their receipt. See NY Fed governor Beardsley Ruml’s (1947) article “Taxes for revenue are obsolete.” It’s online.

        And what do we call the dollars spent, but not yet retrieved in taxes–you know, the dollars in your wallet? Answer #1: The dollar financial assets of the population. Answer #2: (part of) national debt. Both answers describe exactly the same thing, just as your bank account is your asset, but the bank’s debt. You can march down to the bank and ask it to reduce its debt because you just hate the word “debt,” but it wouldn’t be very sensible.

        Scandinavian countries like Finland have given their homeless places to live. Saying a much richer country like the US can’t do it is just disingenuous.

        Meanwhile, your question #4 is right on point. I’ve heard from a friend who does HVAC work that the affordable housing he’s seen and maintained typically ends up trashed.

        This goes to the nature of poverty, and the possibility of sabotage. Poor people are far less concerned about money and material things than you & I are (and are typically more generous and humble, although not always). They will neglect maintenance. This is not a deep mystery. So public policymakers who don’t account for the need for this additional maintenance are, in effect, sabotaging the antipoverty programs. Sabotage by proxy–convincing citizens like yourself that poverty is always deserved, so you spread the mythical thinking that housing the poor is unaffordable–is part of that picture.

        As a relative who used to work in philanthropy, with lots of wealthy people, told me: “Ninety percent of these guys were born on third base, but all of them want to act like they hit a triple.” Wealth and poverty both are often undeserved, and the promise of a possible way out of poverty was one of the founding ideas of the USA.

        Sabotage is an integral part of US politics. If you want to know more, I’d suggest https://ggwash.org/view/78164/how-public-housing-was-destined-to-fail

  5. “Labor discipline sends the message that you had better take whatever crappy job is on offer or suffer the indignities of poverty (and what’s free even to poor people is pretty crappy) even homelessness and starvation.”

    Yup, you have to do what you have to do in order to feed your family and pay your bills. I’ve been laid off my job three times in my life and I had to take other jobs that paid less and were what you might call crappy jobs.

    1. Now imagine the leverage you’d have with your employer if you didn’t have to take a crappy job. The bottom 90% of real incomes have increased $59 since 1972. If that were an inch on a bar graph, the bar for the top 10% would be 141 feet high. The bar for the top 0.1% would be five miles high. (Source: David Cay Johnston)

      Labor productivity has risen, but wages haven’t. No bargaining leverage.

  6. “and what’s free even to poor people is pretty crappy”

    The good news is the that the work that involves crappy jobs doesn’t actually need to be done; the important thing is that no one suffer the indignity of crappy jobs, not that jobs be done.

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