> Let's say theres 100 apartments in the entire town, and they are all owned by the same company. Next let's say they build 50 more apartments and theres now 1000 apartments still all owned by the same company. Given the number of apartments has increased, renters now have more power to negotiate as the owners have more units they need to fill.
Unfortunately, that's not what is happening on the ground. In my town, they've built hundreds of units over the past years and rent has gone up. The building facing mine was newly built and I went there to see if I can score some deal and they did not budge at all. Half the building was kept empty for about a year, until the new generations of tech workers moved to the area to occupy them.
It's a numbers game but not the way you think. It's often more lucrative to lose money in the short term but still keep rent expensive for the future. This is why owners are being sued right now for price fixing by using Realpage. See https://mynorthwest.com/3719431/property-owners-accused-of-p...
I think a lot of people mistake cause & effect.
What if the housing is being built because they expect rent to go up?
If supply went up say 5% and rent went up 10%, what do people think would have happened in the 0% supply increase mirror universe?
People can't just make you spend money.
US has been underbuilding housing, especially in blue coastal cities, for generations. The last 25 years has seen a big move back to these cities where everything is getting bid up. And then the surrounding burbs, commuter built, secondary cities, etc follow suit.
You're talking hypothetical, I'm talking factual and historical. There's no 'what ifs' here. There was price fixing and the courts are going to decide the magnitude. What you're saying is not false, it actually makes it worse, making already scarce housing even more inaccessible. It's actually quite amazing to see homeless people on the streets, service workers commuting hours/week, first responders not being able to afford living locally and at the same time more than half the newly built apartments empty just to help keep the price up.
Unfortunately, that's not what is happening on the ground. In my town, they've built hundreds of units over the past years and rent has gone up. The building facing mine was newly built and I went there to see if I can score some deal and they did not budge at all. Half the building was kept empty for about a year, until the new generations of tech workers moved to the area to occupy them.
It's a numbers game but not the way you think. It's often more lucrative to lose money in the short term but still keep rent expensive for the future. This is why owners are being sued right now for price fixing by using Realpage. See https://mynorthwest.com/3719431/property-owners-accused-of-p...