San Diego rents declined following surge in supply

I've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?

Yes, after all there are countless examples where doing just that lowered rent long term. Simple as that, a shame that dummies don’t get it.

In fact we should force current owners to sell in order build more densely on their land! And keep doing that until their housing valuation decimates.

God most of the "discussion" around housing is such copium by obviously-biased people trying to convince everyone that we shouldn't have access to high quality housing. Yes, in the year 2026, despite all of humanity's achievements, it's of course IMPOSSIBLE to configure any type of society such that housing is decent and fair for all. IMPOSSIBLE, did you hear? Nope, it just won't work. Whatever your reason, you're wrong, society is perfect already and we cannot improve.

And the reasons people try to give... Just hilarious to evaluate from a high level. Oh, no we can't have good housing because supply and demand has determined what we have is optimal. Oh actually even if you did adjust supply and demand, it wouldn't fix the issue anyway, so don't try anything. Ah no you can't have more houses because then how will people commute?! Unsolvable! There aren't enough houses in a reasonable distance from urban centres? God well how about you just build a house in the outback where the supermarket is 200km away then! No we can't have more houses because then it will attract <demographic I don't like>. But think of the children - how will they survive without a 10 acre backyard to play in??

It's so disgustingly painfully obvious to any reasonable person that we have no reason to have a housing crisis other than certain people collecting those fat stacks of cash, sweet cash.

Building the house is the easiest part of building a house.

The trick is in creating new supply when faced with:

* Existing land/property owners who dont particularly want to give up their land.

* Property developers who would rather flog one ultra luxury unit to a foreign buyer than 3 to somebody on a median income.

* NIMBYs with multimillion dollar mortgages terrified that denser housing will push them into negative equity.

I see the "supply and demand" straw man is propped up well and often in this thread. Let's talk about the actual dynamics in play:

1) Rent-Fixing: This is widespread across the country and the actual reason why inventory increases often (commonly) do not lower prices. There are multiple tactics landlords have used to ratchet up rates without ever letting them drop. These include lease concessions that don't affect the base rent in lieu of rate drops in step with lowered demand, warehousing that artificially limits accessible supply even when new, physical units are hitting the market, and algorithmic price-fixing had allowed landlords within a region to stay in lock step without breaking rank lower. When landlords are able to use such tactics with impunity, they absolutely do warp supply-demand dynamics and allow rent rates to stay high even in the face of expanding actual inventory. For rents to decline, you have to break large landlords' ability to set their price.

2) Builder Subsidies: "Just build more and prices will drop," ignores that the incentive structures municipalities use to draw developers are an additional burden on residents. These for-profit corporations then seek to make a profit on their investment, leading to no direct meaningful inventory increase in the affordable unit range. Worse, developers often target existing affordable units for their redevelopment, destroying the very units that the new inventory is supposed to ultimately reduce demand for. In order for "build more" to drive down rents, it can't be done the way it has been, which mostly ends up being a giveaway to developers at the expense of the tax base and displaced renters.

San Diego is a special case where it seems that the expanding inventory has been driven not by corporate developers, but by the construction of ADUs, which are built by homeowners out-of-pocket, are not tax-subsidized and, in fact, increase the taxable value of property. In this way, they work almost counter to traditional development, and these factors combine with their being created and operated outside of the control of corporate landlords means that they represent new and meaningful competition to those landlords. Thus, efficiencies are sought and prices drop.

Encourage ADUs. Avoid subsidizing large developers and corporate landlords. If there is the political will, get the government directly involved in constructing subsidized owner-occupied, human-scale housing, as in Singapore and the pre-Thatcher UK. Relax zoning and build out public transit and car-free infrastructure in order to reduce the accessibility premium, as in Japan. That is how "build more" actually can work to lower rates.

Well, that will work in a 1M people city, but in larger ones you also have to fix transit.

Another impossible problem, that nobody has ever been able to discover the solution is to build mass transit. Maybe one day people will manage to solve it.

There is abundance of housing. It's just that people want to live in big metro areas that have extreme concentration of economic opportunity and amenities.

I don't understand how transforming every urban area into Kowloon Walled City will solve that unless your plan is to make it so dense that people will finally find it undesirable to live there?

San Francisco is notoriously the most anti-new-housing city in the country.

I agree, comparing to other expensive markets seems a bit odd, rather than comparing to markets with some other similarity (population, geography, median income, et cetera). The full table in the original report is much more interesting:

https://www.zumper.com/rent-research/national-rent-report

Many interesting comparisons to be made, especially places where rents fell YoY despite population growth.

It's actually a combination of both, leaving out more expensive smaller markets.

Right. What the reporter calls a "surge in supply" is an increase in "active listings", which doesn't differentiate from listings due to new construction vs listings due to people leaving.

Also, I could not find the "active listings" data in Zumper's report[1]. And then I noticed the chart with the active listing data says it was made by Brenden Tuccinardi/KPBS, so this was done by a reporter, not a Zumper data analyst. It's a bit fishy.

[1] https://www.zumper.com/rent-research/national-rent-report

Very off the cuff but I do see some news about shrinking population - https://www.reddit.com/r/sandiego/comments/1s71z3a/san_diego...

I suspect lower demand was more likely (although more supply never hurts).

San Diego has a ton of contractors dependent upon the federal government. I imagine the shenanigans of the current administration caused a bunch of them to pack it in and leave town.

The majority of the "more housing = cheaper rent" success stories crowed about on the internet correspond with net population exodus. Austin, Minneapolis, now San Diego.

Edit: I think we should build several million more units of housing in the US. I'm salty because all the new housing I've seen is ugly shitboxes owned by national property firms that make everywhere feel like nowhere.

That part is the obvious part. I want to know how they got all the entrenched landowners to let new builds in their neighborhoods and drive down values. The NIMBYs are usually the problem.

A mainstream view on one side of the political spectrum that increase in new home supply(especially if high end) does not lower prices or reduce shortage.

> One well-worn refrain of progressive urban politics is that new, “luxury” housing will not help solve the housing shortage. A 2024 study of U.S. voters found that 30 to 40 percent believed more housing would, instead, increase prices, and another 30 percent believed it would have no effect

https://www.theatlantic.com/ideas/2026/02/housing-crisis-ric...

So does decrease in demand! Pinch you again.

Except when it doesn't. From the same article, Seattle and Oakland had supply increase 13% and 6% respectively and both saw average rents go up. Long Beach, CA and Santa Ana, CA both had supply increase by over 10% and saw rents stay basically flat.

More supply generally will help, but it's not a silver bullet.

Landlords in San Diego were feeling less greedy this year. Same as lithium miners between 2022-2025.

But SSD manufacturers and oil producers have been feeling really greedy this year.

Funny thing about permits...

I mean it’s just a sunset on some sand. You can get that all the way from Chile to Alaska, not a big deal.

Relevant metric is "New housing units per 1k existing" which is quite low in Manhattan.

For some examples, go https://constructioncoverage.com/research/cities-investing-m... , look at metros that authorized many new units in 2023, and then look at inflation-adjusted home price change from 2023-2025.

Like magic, you will find that post-inflation home value growth was low in the metros that built the most: Austin , Raleigh-Cary, Nashville, Jacksonville, Houston.

Black communities were bulldozed to make way for highways for being "slums" and forced into isolated "public" housing. This only concentrated the issued of crime and poverty and moved it out of sight of richer whiter communities. This was labeled as "Urban Renewal" and passed under the Housing Act of 1949.

It's not just public housing it's all housing. Even some public housing advocates argue against housing reforms that would make it possible to build public housing!

I've been supporting an advocacy group looking to build social housing and at least half the pushback is from anti-housing "tenant advocates" that work for non-profits funded by extremely foundations with boards that are all very wealthy with multiple homes, and don't see the need for more housing. The "tenant advocates" seem to view housing similarly and only support public housing to the extent that it doesn't actually get built.

The obvious reason is that to a first approximation nobody is building public housing, and so appeals to public housing, especially from owner-residents, read to housing activists as a dodge, a way to perform advocacy for housing without actually providing housing.

A subtler reason is that public housing is drastically more expensive to build than private housing. There's multifarious reasons for this, and the underlying problem is absolutely worth solving (it's one of the three big prescriptions in Abundance), but it's a bigger problem than housing. Right now, people are focused on whatever's going to bring the most units online fastest.