Housing Roundup #13: More Dakka

Build more housing where people want to live.

The rest is commentary. If there is enough housing, it will be affordable, people will afford more house, and people will be able to live where they want to live.

It’s always been that simple.

Increased supply of any kind of housing increases affordability of all kinds of housing.

Are there other things that would also be helpful? Yes, but they’re commentary.

Freeing up existing underused housing, for example, is helpful. It is commentary.

Let’s enjoy the lull and see how much of an Infrastructure Week we can do.

New Levels Of Saying Quiet Part Out Loud Even For This Guy

Trump opposes building houses where people want to live, because doing so would let people live there, which would drive down the value of existing homes.

Acyn: Trump: I don’t want to drive housing prices down. I want to drive housing prices up for people who own their homes. You can be sure that will happen.

unusual_whales: Trump: when you make it too easy and cheap to build houses, house prices come down. I don’t want to do that.

Mike Solana: really dumb and bad

Zac Hill: This is truly one of the most cardiac-arrest-inducing quotes in an affordability era…

Classical Liberal Caucus: THE LEFT: building more housing won’t make it cheaper

THE RIGHT: yes it will and that’s bad

I take the bold stance that building more housing makes it cheaper, and that’s good.

Any time you are wondering about Trump’s relationship to affordability, know that where it counts he has taken a bold stance, and that he is explicitly against it.

This isn’t even typically true, since the value of the associated land goes up.

Alec Stapp: This is such a common fallacy.

When you change the law to make it legal to build more homes on the same plot of land, the value of the land goes ***up*** while the per unit price of housing goes ***down***

Homeowners usually own both land and structures!

Whose Side Are You On.

Robotbeat ➐: I actually really appreciate Trump making this political dynamic explicit.

Boring_Business: One of the most significant moments from the Trump Davos speech was when he said the quiet part out loud

You cannot lower housing costs for young people without destroying millions in wealth for boomers

“Every time you make it more affordable for somebody to own a house cheaply, you are actually hurting the value of those houses. I don’t want to do anything to hurt the value of their house.

If I wanted to crush the housing market, I could do that so fast that people could buy houses. But you would destroy people who already have houses.”

Our politicians are sacrificing people in their 20s and 30s for the prosperity of boomers

Let that sink in

Your Intervention Only Partly Solves The Problem So We Are Against It

Trump is against building more housing because it might reduce housing prices.

Julie Weil reports that ‘supply skeptics’ oppose building housing where people want to live because it would not reduce prices by enough to fully take care of our inequality problems, so ‘that’s no way to fix affordability.’

As in, and this is the argument they choose to make here, if we built enough to grow housing stock by 1.5% a year, which in the grand scheme does not sound like much but is these days remarkably hard, then that might cause housing prices to only decline 4% per year, so it would ‘take 18 years before a median one-bedroom apartment becomes affordable for a worker in San Francisco.’

I notice I am confused how this is an objection.

Their other complaint is that the housing being built is too useful and in demand, and thus will cost too much money, and therefore it should be worse instead.

More Dakka

A study finds that if you modestly more housing, you only modestly reduce prices.

Specifically, if San Francisco increased market-rate housing by 1.5% per year, which it notes is more than triple the current rate, it would take 18-124 years to make the median one-bedroom ‘affordable’ to someone earning the median wage for non-college graduates.

That’s a bizarre standard. Why should a single non-graduate be able to live alone in San Francisco proper, one of the most desirable places on Earth? But if you want that, yeah, you’re going to need to expand the housing stock more than 27%.

Could you do that? Very obviously you could do that. You could build 30-story buildings all over the place, if you wanted to. Austin proves you can do it. But that’s not going to happen in San Francisco until both zoning and other government-imposed costs and veto points are handled.

As usual, if someone argues ‘you could double the housing stock and prices would not come down,’ the response is ‘that’s not how it works but if it was then that sounds amazing, think how much value you would be creating.’

Abundance

Matthew Yglesias: There are a lot of regulations curtailing air pollution. If we repeal those regs, then corporations will generate abundant air pollution.

This is bad because air pollution is bad.

If we repeal regs that curtail housing production, corporations will generate housing.

Changes In Rent Are Largely About Changes In Supply

Guess what the places with the largest drops have in common. This is year over year.

And guess what the places with the largest growth in rents?

Or:

Austin

Austin is a large outlier in terms of population growth versus rent growth, it turns out all you have to do is build even more housing.

Mike Fellman argues that Austin could only build so much because of rising rents, as opposed to high absolute rents, because the model requires building appreciation. Except this makes absolutely no sense, because the cost of construction is distinct from the value of the constructed building.

Or at least, those things are highly distinct in places like San Francisco, Los Angeles or New York, where housing is extremely valuable but you have trouble getting permission to build it. If you allow building housing, then yes you should expect the two to converge, at which point it only makes sense to build more housing if you expect appreciation, and yes this helps explain why Austin may have actively overbuilt, although my guess is it at most got ahead of itself a bit.

America

Peter Wildeford: I wonder why population is moving south and the south is getting more electoral votes 🤔

Hunter: The South is currently building more apartments than every other region

of the US combined.

Veronica Grecu: New apartment construction in the U.S. is flexing its muscle again in 2025, with an estimated 506,353 units expected to be opened nationwide by the end of the year.

New York Metro includes a wide area and places like Hackensack and Yonkers. Brooklyn is delivering 7,189 units, Manhattan 4,662 and Queens 2,630, versus 15,195 for Austin and 12,365 for Charlotte.

Minnesota

A new paper by Helena Gu and David Munro claims that five years after the Minneapolis 2040 plan, home prices were 16%-34% lower and rents were 17.5%-34% lower versus a counterfactual Minneapolis without that reform (p=0.012). But as much as I want to believe this worked amazingly well, and that there aren’t any other reasons driving this, the housing hasn’t been built yet.

We explore the possible mechanism of these impacts and find that the reform did not trigger a construction boom or an immediate increase in the housing supply. Instead, the observed price reductions appear to stem from a softening of housing demand, likely driven by altered expectations about the housing market.

I get why purchase prices go down anticipating future supply. But rents shouldn’t do the same, and should rise relative to purchase prices. So why didn’t that happen? I can come up with some ‘just so’ stories that try to explain some of the fall in rents due to anticipatory and longer term impacts of rentals, but rents falling fully in line with sale prices seems like it has to be wrong. If it’s right, the market is being highly irrational.

Debunking Obvious Nonsense About Monopolistic Practices

I sometimes worry I am pushing the envelope on how Obviously something has to be Nonsense before it counts as Obvious Nonsense.

This is not one of those times.

Derek Thompson: In housing, for example, Ezra Klein and I write that a key bottleneck to homebuilding in the last few decades has been legal barriers to construction, including zoning laws and minimum lot sizes. This is a mainstream view supported by economists and scholars who have studied the issue for decades.

The antitrust left, however, claims that the more significant factor is that big homebuilders abuse their power by holding back construction to juice their profits. “Big homebuilders withhold housing supply,” the antitrust advocate Matt Stoller has claimed.

In their paper “Post-Neoliberal Housing Policy,” the law professors Christopher Serkin and Ganesh Sitaraman criticize market concentration in homebuilding and call for “tools from anti-monopoly policy.”

The position that the primary problem is monopolies (or at least oligopolies) has never made any sense. Even if it theoretically did make sense and was a substantial driver holding back construction, zoning reform would allow for entry, as the mechanism to enforce the oligopoly is difficulty getting permission to build.

At a high level, I have never found these arguments persuasive. One hallmark of a monopolistic market is rising profits. But researchers have found that developer profits have remained steady.

If zoning imposes artificial supply restrictions, then profits could rise via a similar mechanism that way, which I presume is not happening because instead we build in increasingly convoluted ways while paying various massive de facto bribes to various veto points. But if profits are not rising, that rules out monopolistic supply restrictions.

In any case, Thompson decides to engage with one prominent article in particular.

In “Messing With Texas: How Big Homebuilders and Private Equity Made American Cities Unaffordable,” Musharbash writes that housing in the Dallas metro, like many other cities, has become much more expensive in the last few years.

…

I’m not an economist or a lawyer. I’m just a journalist. To the extent that I’m good at anything, it’s calling people on the phone and writing down what they say. So I reached out to the primary sources that Musharbash quotes throughout the piece.

What I found was astonishing. The economist Musharbash cites told me that his theories had been misapplied. The housing analysts quoted in the piece told me Musharbash distorted their points and reached dubious, or even flatly wrong, conclusions. The leading monopoly researcher I spoke to, whose work has been celebrated by the antitrust left, told me that the entire thrust of the article—and, by extension, much of the antitrust-housing philosophy—defied sophisticated antitrust analysis.

The essay you’re reading is very long. But I can sum it up in one sentence: The Musharbash essay on Dallas—like too much of the antitrust left’s work on housing—is filled with out-of-context quotes, overconfident assertions lacking evidence, and generally misguided claims. Now let’s go through them one by one.

I dispute one of Thompson’s claims. His essay is not that long. Well, at least not by my standards. But it is too long to quote that much of it, so we’ll hit the highlights.

Claim #1: Dallas is a “homebuilder oligopoly.”

Reality: I called the key oligopoly researcher cited in the Musharbash essay. He disagreed with the use of his work and told me that any city with Dallas’s construction record was “100 percent” not an oligopoly.

…

I called Luis Quintero to ask what level of market concentration in homebuilding he considered to be dangerous. In the most concentrated markets, Quintero said, one or two firms account for 90 percent of new housing. But problems begin to accelerate, he said, if five or six firms account for 90 percent of new housing.

I immediately saw a problem. In Dallas, the top two firms built just 30 percent of new homes in 2023. The top six firms barely account for 50 percent of new housing. Musharbash’s claim that a homebuilding oligopoly is crushing housing supply in Dallas relies on an economic analysis that doesn’t apply to Dallas at all. I asked Quintero about this: Would you agree that Dallas is “a bad application” of your paper? “I would definitely agree,” Quintero told me.

…

I tracked down a complete listing of the country’s 50 largest homebuilding markets, from #1 Dallas to #50 Cincinnati. How many meet Quintero’s first oligopoly threshold (two companies = 90 percent of the market)? Zero out of 50. And how many meet his second threshold (six companies = 90 percent of the market)? One: Cincinnati.

There is then further discussion with Quintero, who defends his original (very different) claim that oligopolies in housing construction matter by pointing to impact on suburbs or small towns with higher concentration.

Claim #2: Dallas housing experts say local homebuilders are monopolies who are “devouring” the market.

Reality: When I called up a Dallas housing expert [John McManus] cited several times in Musharbash’s essay, he disagreed profoundly with its thesis. He’s actually a big YIMBY.

…

So, what did McManus think was more responsible for driving up the cost of housing in Dallas? “Land use regulation,” he said. “Zoning?” I asked. “Yes. Land constraints and zoning that require certain footage along the street, or minimum lot sizes, or requirements about three-car garages, are more the cause of the prices increasing now,” he said.

We’re already approaching ‘stop, stop, he’s already dead’ territory, but we keep going.

Claim #3: Industry experts have data proving that homebuilding oligopolies are holding back national housing construction.

Reality: I reached out to an industry expert whom the antitrust folks like to quote. He told me that he disagreed with the way that his analysis is being used by Musharbash, Stoller, and other antitrust advocates.

Claim #4: “X companies account for Y percent of this industry” is a smart way to think about market concentration.

Reality: A leading monopoly researcher told me this is an incomplete and overly simplistic way to think about monopoly power.

Like Lambert, Roberts said he couldn’t rule out the possibility that larger homebuilders are actually good for the housing market— or even that today’s homebuilding markets would benefit from being even more concentrated.

So often we run into situations like this, where there is an Obvious Nonsense theory that never made any sense even under ideal conditions, and then you find out that even on its own terms it makes no sense and conditions are not only not remotely ideal, they don’t match up to the claims at all.

One can also look at the following simpler argument:

1. The argument from monopoly agrees that the primary problem is not enough housing where people want to live and the issue is lack of construction.

2. Homebuilders keep constantly fighting to build more housing than they are allowed to build.

3. When we let them build more housing they reliably build more.

4. We’re done here, right?

A group can’t simultaneously be restricting supply and also fighting to create as much supply as it can. It doesn’t make sense. Stop it.

At this point, one would like to invoke ‘stop stop he’s already dead’ but, well:

Matt Stoller: Ok, so I’m going to call out @DKThomp for journalistic malpractice and unethical behavior. He wrote a piece that was supposedly ‘debunking’ something that antitrust lawyer @musharbash_b put together on how Wall Street limits housing supply.

…

@DKThomp attacked the piece. Here’s what he said on Bluesky:

“I did something really simple. I called up their sources. Everyone I spoke to told me the same thing: Their claims are bullshit.”

Wow that sounds bad! So I picked up the phone.

Stoller goes on to claim that Thompson misrepresented the arguments in the original article when calling his sources, in particular Lance Lambert, and calls out Thompson as being in bad faith.

Then of course Derek Thompson picked up the phone again, called Lance again, and says he got Lance to sign off on every quote and all the language, and got Lance to say he agrees with Derek’s position, and that homebuilders are not a cartel or oligopoly, and in particular “I hope you both communicate my view that I don’t think the big builders are bad actors, or even that they have the power to be the bad actors.”

And indeed we have a response from Lance that both of them posted, in which Lance affirms that Derek is correct, and affirms that there is no one holding back supply. Various people including Matt tried to present this as a balanced perspective or as backing Matt. I do think Lance’s response is balanced and very good, but in a way that (in the most polite way possible) completely vindicates Derek.

Matt attempted to go after Derek personally up to and including accusing him of malpractice and unethical behavior, and calling for The Atlantic to ‘look over his past work.’ That itself is highly unethical behavior in this context. Eric Levitz has an unnecessary but highly robust takedown here.

Age Of The Median Homebuyer

Claims went around that the median home buyer was 59 years old. What?

Does it make any sense that the median home buyer could be 59? Really?

The real answer is closer to 40, which makes more sense and seems entirely fine.

Connor O’Brien: ​The National Association of Realtors says the age of the median homebuyer is now 59. Is that actually true?

In the American Community Survey, the median age of heads of households who are 1) homeowners and 2) moved in within the last year is 41.

The American Housing Survey also doesn’t show a major run-up in the median age of average buyers *or* the median age of first-time homebuyers.

This is average, not median age, but the New York Fed finds that first-time homebuyers were *younger* in 2024 than in the 2000s. Haven’t gotten older on average in nearly 20 years.

… As my colleague has pointed out, Gen Z and Millennials have taken longer to achieve the same home ownership rates than prior generations.

Homeownership is indeed less common for young people than it used to be.

Just isn’t nearly as dire as NAR implies.

… New York Fed Consumer Credit Panel data from Equifax (which excludes all-cash buyers, TBF) finds that a majority of home buyers were first-time buyers in 2023. Overall volumes are down since the early 2000s, of course.

Median 2024 homebuyer in the Survey of Household Economics and Decisionmaking: Age 39

A Zillow national survey of 20,000 homebuyers finds that the median buyer (among all buyers, not just first-time buyers) is 42 years old. The survey was in the field between April and September 2025.

We also have this survey showing a sharp rise in first time buyer age after 2020, with the obvious reason being interest rates, but Ascendiqute points out that HUD and Fannie/Freddie define ‘first time homebuyer’ as not having ownership in a primary residence for 3 years prior. So this is picking up a bunch of not-first-time buyers in its averages, who might have rented for a few years and then bought back in due to Covid dynamics.

Property Taxes Improve Allocation Efficiency

Whereas we often do the opposite via capital gains tax implications of selling, which provides strong incentives to stay put in ‘too much house.’

Bernard Stanford: A retired, empty-nester couple feeling pressure to downsize because their property tax keeps rising as their home appreciates—is exactly how the system SHOULD work.

Hunter: People absolutely HATE this, but it’s true!

It’s just way better and more important for society for a young couple to be able to buy a larger house and start a family than it is to prioritize older owners hanging on to huge homes they no longer need, memories be damned.

Matthew Yglesias: It would really be good if more empty nester couples living in large homes in desirable suburbs would realize their capital gains and downsize to smaller dwellings, but almost every jurisdiction gives special property tax breaks to discourage this.

Apartment buildings with elevators, less square footage to clean, no yard work, professional maintenance, etc seem ideal for America’s growing senior citizen population and you’d free up inventory for young families who will actually use the space.

If an old couple values the memories or other advantages of staying put, such that they are the efficient owners of the space, they should be willing to pay the associated property taxes. If they can’t or won’t, that means they either don’t actually value the house as much as the market does, are effectively ‘living beyond their means’ or both, and often this will mostly be due to inertia.

Property taxes also serve to lower the market value of housing, so the higher taxes don’t make it harder for new homeowners to buy, indeed they may do the opposite, and are highly progressive and a badly needed transfer to those starting out in life.

The instinct against this is the idea that you should be able to own real property ‘free and clear’ and what’s yours is yours, without being forced to engage with any market, and rising property values shouldn’t effectively be able to force you out if you want to stay. I do totally get that attitude, but I don’t think we get that luxury.

Ideally, of course, we would instead have a tax on the unimproved value of land.

Another big advantage of higher property taxes is that it protects against people wanting their property values to rise. This will make them more willing to build new housing.

The downside is that property taxes apply to newly built property and the appreciation in value, so it discourages building. Ideally you would approximate the ‘unimproved value of land’ rule by only taxing appreciation from construction, or new buildings, after a reasonably long period, but yes you have to strike a balance here.

In exchange for the higher property taxes we should eliminate capital gains taxes on home sales for primary residences up to some reasonable limit, which further encourages people not to stick with existing homes.

More Of Old People Inefficiently And Systematically Stealing From Young People

In case you were worried young people might ever own real property.

Or as Marc calls it, without even putting poor in air quotes:

Marc Goldwein: More tax breaks for poor seniors

This is New Jersey giving those 65 and older a credit for 50% of their property tax bill, up to $6,500, as long as they have a total income of under $500,000. Income, not wealth, while they are over 65. No, they’re not kidding.