Part 11/15:
Shifts During COVID-19: A Crisis of Supply and Demand
Using COVID-19 as a recent example, he describes how demand for rental units plummeted as people moved out of cities, leading to lower prices. Simultaneously, the supply of available units increased, creating a surplus.
He concludes that the housing crisis is fundamentally a supply-side issue: to reduce rents, New York must increase supply. This involves reducing regulatory barriers—making it easier and less expensive to build new units. Unfortunately, current policies favor price controls and rent freezes, which distort the market:
- Rent controls artificially freeze prices, disincentivizing landlords from maintaining or developing units.