[digitaltrees]

If leads to building that floods the system with supply then rent won’t increase. Landlords and lenders would have to adjust purchase prices and cap rates so valuations would come down. So this would need be gradually phased in until normal. The government would need to support home builders, buyers and landlords. But eventually the housing stock supply increase would match and be tied to new household formation.

At the end of the day most economic activity is really an exercise in ratios. Some states don’t charge sales taxes. Some change double digits. Yet retailers are able to function in both environments.

What is clear is that rental and purchase housing is increasing beyond inflation since 2008 and COVID and that’s not good for tenants or landlords.