Part 10/15:
At the core of the discussion is an explanation of how traditional market mechanics—supply and demand—govern housing prices. The speaker uses charts and clear definitions to illustrate these principles:
Supply Side: Composed of landlords and developers, who aim to maximize profit by charging as much as possible and providing as many units as feasible. Their relationship with price and quantity is positive—higher prices incentivize more supply.
Demand Side: Made up of renters seeking affordable housing. Their relationship to price and quantity is negative—higher prices result in less demand.
He emphasizes that market equilibrium is where supply and demand curves intersect, dictating the rental prices.