[jjav]

> Increasing housing supply will absolutely decrease housing prices.

> That’s so obvious it’s nearly a truism.

And that is why Manhattan, due to having the most housing units per square mile, is one of the cheapest places to live in the US.

Since it's not, it is not a truism that merely increasing the housing supply will decrease prices. It takes more than that.

As long as you have excess people willing and able to buy $1M studios, every new studio will get snapped up. Prices can only begin to drop if you build so many that you exhaust the supply of people willing to pay $1M and the highest bid left is $900K.

Think of it as analogous to bond issuances. Just because the government issues more and more bonds the price won't drop as long as there are buyers to clear the price. Bond price only drops when they run dry of buyers at the higher price and must start accepting lower offers.

[pibaker]

> And that is why Manhattan, due to having the most housing units per square mile, is one of the cheapest places to live in the US.

More housing will not make manhattan cheaper than Charleston, West Virginia, but it will make manhattan cheaper than how manhattan is today. That's the point.

Your argument is like saying obese people should not go on diet because statistically the people who go on diet are more overweight than average.

[mplanchard]

Does that hold up per capita? Units per area isn’t super meaningful when comparing housing costs without a sense for the size of the population competing for them.

Where I live has ~21k units for ~45k residents (47%), and a median home price of $440k or so. NYC has about 3.6 M housing units for ~8.5 M people (42%), and a median home price of $870k. For NYC to make up that 5% they would need around 425k housing units.

Obviously these numbers can’t tell the whole story, but it does seem like the supply is fundamentally more constrained in NYC than here, and here is already pretty tight, with very low vacancy rates, high rental prices, and expensive homes.

Anyway NYC plans to build 200k units over the coming decade, increasing the supply in order to reduce the cost. Of course that’s not the only item in the plan to reduce costs, but it’s a major component.