New housing slows or lowers rents

A Pew report came out last year on housing construction and rents that is worth commenting on, because it addresses the most common complaint about new housing: That it drives up living costs. 

People see new, expensive housing that is unaffordable, they see housing prices going up, and they put two and two together. But according to Pew, the math is not that simple. The charitable trust that focuses on research conducted an extensive nationwide survey, finding that “New housing slows rent growth most for older, more affordable units.”

A plentiful supply of new housing slows rent growth and sometimes leads to decreases in rent in older, less expensive housing. This is the category of housing that is occupied by lower-income, working-class families. 

As the graph at the top shows, Metro areas that are growing but also have added substantially to new housing saw rents drop in Class C buildings from (and lesser amounts in Class A and B) from 2023 to 2024. “Previous analysis from Pew shows that cities such as Chicago, Los Angeles, and New York that have severely limited their housing growth in recent decades have seen costs rise and displacement occur.”

It is worth reading this report, found here.