> Will building more units / appartments/ houses bring the price down?
Ballooning housing prices are a prime example of demand exceeding supply leading to increased prices. Increasing supply will decrease prices or at least limit further price increase.
Do we know how much additional supply would have to be built to saturate demand? Is that even freasible?
It seems like an intractable problem to me because it's not like anything we do, in these big popular cities, is going to have much of an effect in the next 12 months to 5 years.
Personally, I solved the problem for myself by moving away from the big city I was in to a sub 100k population centre. There's no way I was going to be able to afford to buy a place within an hours drive of where I worked, not in the foreseeable future.
You’d need 5,000 units a year in San Francisco to keep rents steady. This is the goal SF’s mayor just set for the city, google “Ed Lee Medium” to find it.
It is definitely not an intractable problem given SF built 5,000 units in 2016. Upzoning, lowering impact fees, speeding housing approvals for things like ADU’s, making discretionary review tougher (it currently costs $700 to delay a project by three months), electing pro-housing candidates, having places like Brisbane choose apartments over another office park - all of these will help, it’s not intractable by any stretch.
If we just slightly upzoned the whole western half of the city, and added public transit to go with it (even better if streets were narrowed a bit and street parking reduced), San Francisco could fit a whole heck of a lot more people without ever needing new buildings taller than 4 or 5 stories.
San Francisco zoning through huge swaths of the city is restricted to single-family houses and scattered duplexes, with only a few mixed-use areas. It’s supposed to be a booming city, but more than half of it is zoned to be a sleepy beach town. (And a lot of the Bay Area is even worse.)
Here’s the SF zoning map. All the pale yellow part is very low density; If it were up to me we would change half or more of that pale yellow area to some mix of darker yellow, orange, and purple. http://default.sfplanning.org/zoning/zoning_map.pdf
5000 units, and you think that's a lot? Last year in Warsaw (which is smaller than SF) there were almost 20,000 new apartments built. You now see how much impact all those zoning laws have.
According to Wikipedia SF City and County has a population of 870k, Warsaw 1.8 million. The metro area 4.6M vs 3.1M respectively. So I'd say the same ballpark. That said 5000 units seems like nothing at these population sizes. I live near Wrocław (650k city population, 1.1M metro), there were 10.000 new units in 2016 and this year will be similar. And this number doesn't include private investments (people building a house for themselves), only housing built by developers and sold on the market.
Housing is one of less elastic goods you will find around. Basic food is probably less elastic, it viewed as a single good, but you won't find many other counter examples.
Ballooning housing prices are a prime example of demand exceeding supply leading to increased prices. Increasing supply will decrease prices or at least limit further price increase.