If 10 houses goes up to 100, and 100 people waiting for that goes to 1000, you effectively have same demand. It is not clear you need 10x demand to drive up prices, all you need is higher demand with affordability.
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I heard car prices are going up because many factories are cutting production due to chip shortage. Apparently people have it all wrong. The new theory from this thread says that all they need to do to lower price is to cut production even more.
Less supply would lead to lower price!
I donât think anyone here said less supply will lead to lower price. All that was said was, more supply does not necessarily mean lower price. One has to really understand the supply, and affordable demand before reaching any conclusions. 
More supply leads to lower price. Not sure how that became a controversial idea.
No one disagrees. What I am saying (and I think also some others like @girlykick) is that the price of the underlying land goes up when SFH zoning is changed to allow lot bifurcation and building duplexes/fourplexes.
There are 2 parts to the transaction:
Part 1: Developer outbids families to acquire land on which an old SFH stands. This is the part where price increases because the land can be developed in different ways.
Part 2: Developer builds 4 units and sells each unit at a lower price than what a comparable SFH would have cost. This is the part where increased supply causes price to fall. For instance, in my area, median SFH price is about $2.5M. Developers currently are building new TH in less desirable neighborhoods like on El Camino or north of 101 where schools are not as good, and selling for $1.5M and up. If they can build fourplexes in more âdesirableâ established neighborhoods, they will price each unit at $1.75-2M or so. Still cheaper than an SFHâŚ
Multi family housing is and always will be in less desirable neighborhoods. The idea up zoning scares the crap out of existing homeowners and nimbyies. This battle is far from over. Nimbyies will use every means necessary to keep duplexes and four plexes out of their neighborhoods. There is more than just land values involved. Traffic parking noise congestion quality of life crime schools. Change is scary. Nimbyies donât want it. And they have been very effective against stopping higher density throughout the BA.
A unit of quarter home and a full single-family home are not comparable products. I do not not see what this discussion about pricing is all about.
@manch is saying that increased supply reduces housing prices. He is right. The price of each unit in a fourplex will be less than the price of the SFH that is replaced by the fourplex. They are of course not apples to apples, but if you treat them strictly as units of housing, then the price per unit drops if more units can be built on the same land
you compare prices of comparable offering. A bunkbed in homeless shelter is not comparable to a room in Hyatt.
When you convert Single Family homes in a neighborhood, you reduce the supply of single family homes. Left hates everything that promotes free and individual lifestyle: cars, garages, highways, single family homes, personal transportation and personal gods.
True, which is why we are arguing that the price of SFH will go up, even though the overall price per unit of new housing goes down.
The legislators in Sac donât care about details. They just want to roll the dice and capture a big headline that they are enabling more housing units. Unintended consequences be damned
@manch If it is as obvious and simple, then one should wonder why there is a detailed study on this for a particular market. If you have a replica of this study for Bay Area market, then it is interesting. As you can see from the conclusion there are multitude of factors to consider and one has to gather the right details to backup claims. It is not as simple as: more supply leads to lower price without understanding the demand, desirability, affordability, population movement, and other political / economic trends.
Nimbyies are on both political sides. The mother of BA nimbyies is the the Save the Bay movement. Started in the 60s by Republican club women. Left or right nobody wants change or more traffic, crowds and such. But cities naturally grow and densify. This battle has been going on since WW2 and so far the nimbyies have won.
Think of political parties as political companies, that have people who are there for convenience. A lot of conservatives in states like CA and NY have registered themselves as Democrat. Reagan was a democrat in the early years, so was Trump. A lot of left-leaning people could be found in the republican party.
There are also studies going on right now looking at the effect of horse paste on Covid. Years ago teams of researchers spent valuable time looking for links between MMR vaccines and autism.
When there is a lot of misinformation going on in the mainstream, you bet there will be researchers writing papers on that topic.
There are many âactivistsâ on the left arguing that building more market rate housing wonât help the poor. But look and behold the simple law of supply and demand still holds. The market downstream still gets more affordable even if you just build for the well off.
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Hmm⌠Wonder who researched and quoted this article 
Let us wait and see how this turns out rather than arguing without data.
He thinks houses are fungible
Thought experiment,
Say, an investor is willing to pay $3M for a SFH which he can flip for $3.5M after $50k of cosmetic improvement.
Now, the same house can be built into two duplexes. How much will he willing to pay?
One the one hand I see Sacramento and YIMBYs pushing for more housing. Makes sense to make room for more, right?
One the other hand I see many locals talking about water shortages (we are already rationing and no rain in sight, maybe a prolonged drought). Cutting transit is a money loser, theyâve cut transit already by a lot.
So doubling and quadrupling housing? Who pays for all this infrastructure -for more roads, police, schools, etc.? Where will the infrastructure support come from? From low cost housing? From mrkt rate rental housing?
We only have one 101, one 280, one 80, you name the highway or bridge. Very few (percentage wise) take - or can take - public transit - and roads are pretty clogged already.
Is there a disconnect? Would love to hear both sides. Thanks.
No one is opposed to new housing. However, people are opposed building new house in someone elseâs backyard, which in some way, amounts to displacing the existing people.