In a recent letter to the editor, resident Sam Christy alleged that increasing the supply of housing in our city will not help to bring down the cost of housing.
To suggest that the laws of economics — namely supply and demand — do not function in Cambridge, that we live in some kind of alternate reality where up is down, left is right, and that the scarcity of new housing is not the primary contributor to exorbitant housing costs is farcical.
Cambridge, like most other cities in our country, has not permitted widespread housing development for quite some time; until last year, our zoning explicitly prohibited the meaningful construction of new homes here.
Let’s look at another city that, like Cambridge, has adjusted its zoning to allow for more supply: Austin, Texas. According to an analysis by the Pew Charitable Trusts, after a record amount of housing production (a 30% increase in homes), Austin’s rents fell by 19% between 2021 and 2026.
Even though the population increased, because of Austin’s zoning reforms — because Austin built more homes, housing costs went down.
It’s not rocket science. We can and will build our way to a more affordable Cambridge.
Noah Harper, AICP / Massachusetts Avenue, Cambridge
A stronger
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Yes. The author is 100% correct.
Cambridge is not exempt from basic economics. When demand consistently outstrips supply, prices rise. It’s that simple. The Austin example is not an outlier, it is one of many examples. It is a clear demonstration of what happens when a city allows enough housing to be built: rents fall, even as population grows.
For years, Cambridge chose scarcity by design. If we are serious about affordability, we have to reverse that choice at scale. Without building more housing, nothing else will work.
No, economics is not rocket science but it does require empirical analysis. You cant compare Cambridge at 18,000 people per its 6 sq miles to Austin at 3,000 people per its 300 sq miles.
You could compare Cambridge to all of Windsor, Downtown, Rosedale or Old West Austin, but then your argument fails because housing costs there have NOT fallen with their housing boom but have increased dramatically.
Yes, the laws of economics apply, but you cant ignore ceteris paribus.
Same for your distorted claim that Austins prices have gone down when their housing costs are still up over 40% since 2015. Prices have only dropped from their peak, not overall. Now watch new housing starts cease until excess demand is absorbed and prices remain at the high.
Same for Cambridge despite the zoning changes.
These conversations always start off with someone claiming that building new housing doesn’t help housing affordability because the new homes are expensive. Then someone points out that the places that did successfully build a lot of new housing (Austin, Auckland New Zealand etc.) have seen significant housing affordability improvements. The response to this is always that these places are different from Cambridge for various reasons (population density, total area, or something). It’s definitely true that the Austin city limit encompasses more area; Cambridge is just one municipality in the larger greater Boston area. But that would just mean that to really solve the issue other cities also have to build housing as well. The same people who support Cambridge building more housing also advocate for state level action to encourage other cities to as well.
Regarding the difference in population density, it’s not like there’s some number of people per square mile where additional housing no longer helps housing affordability. Tokyo is an example of a dense city that has consistently built a lot of housing over time and as a result is much more affordable there than similar American cities like New York or San Francisco:
https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html
https://brandondonnelly.com/how-japan-increased-its-housing-supply
The geography point is a distraction. Housing prices are driven by supply relative to demand within a market.
Saying “prices are still up since 2015” misses the point. New housing doesn’t reset prices to old levels. It slows rising rents.
In Austin and similar cities, rents rose less because they built more housing. That means lower rents than if they hadn’t.
Doing nothing is not a solution to a housing shortage.
The effects of new housing construction have been extensively studied. For example, a 2025 Pew Charitable Trusts analysis of 1,654 U.S. ZIP codes found that every 10% increase in housing supply reduced rent growth by about 5%.
This is one of many studies showing that increasing housing supply moderates housing costs.
Opponents often claim that new housing does not reduce costs. That claim is misleading and false. Slower rent growth is a meaningful reduction in housing costs relative to what would otherwise occur.
For example, citing that Austin rents are up 40% since 2015 ignores the counterfactual: without substantial new construction, rents would have risen even more.
That context is conveniently omitted by those who wish to spread disinformation.
Of course, the law of supply & demand applies to housing in Cambridge. However, supply & demand assumes that you are comparing apples to apples, not apples to automobiles. Claiming that a massive increase in new luxury construction will also somehow magically increase the supply of older, naturally affordable units is not good economic theory; it’s neoliberal, delusional gobbledygook. Time to wake up and admit that residents living in reasonably priced homes in existing, high-amenity neighborhoods across the city are not in a big hurry to pack up and move to expensive and soulless profit boxes at Alewife or North Point, or even that new 6-story, AI-designed cube tower down the street. Even when that new building is built on the rubble of their current homes, they are more likely to flee Cambridge entirely rather than triple their rent payment to stay put in a new apartment.
Adding homes is not “neoliberal gobbledygook”. It is how housing markets work.
Even high‑end construction eases pressure on older, cheaper units. The evidence shows that when you add market‑rate homes, higher‑income renters move up, free older apartments, and stop bidding up the old stock.
In fact, studies that track actual moves after new construction find that every 100 so‑called “luxury construction” create dozens of vacancies in below‑median and even bottom‑quintile neighborhoods.
No one claims people in modest Cambridge walk‑ups are dying to move into Alewife glass boxes. The point is that when richer households get new options, they vacate older units, and those ‘moving chains’ are exactly how more supply eases pressure on lower‑priced housing.
It’s supply and demand and it is well-documented and well-substantiated by evidence. The arguments to the contrary are not.
@Doug Brown
Building lots of new expensive housing lowers competition for older housing and brings rents down for older units. “Rubble of their current homes” – so wait, were they owners? Then they made a huge profit from the sale. Were they renters? Then why do you think their rent payments were 1/3 market rate? More supply will always lower prices.
Care to actually cite any relevant studies? Because IMHO, more luxury supply doesn’t trickle down to those forced out by new construction, and reducing regulation isn’t necessarily the best fix for the problem. Indeed, recent studies confirm that analysis:
Turns out we don’t have an over-regulation issue; we have an income issue:
https://researchonline.lse.ac.uk/id/eprint/131070/1/III_Working_Paper_159.pdf
Doug, that’s spot on. In fact, to say that it’s gobbledygook is perhaps an insult to gobbledygook. The continued reliance on Austin as an example is unfathomable to me.
Austin (3,200 people/sq-mi) has 1/6th the density of Cambridge (18,500 people/sq-mi)
Austin (320 sq-mi) has 50-times the land area of Cambridge (6.2 sq-mi)
This is, in effect, a 300x problem when considering how to pack people.
In any industry, you would question whether a given hypothesis is the same at two orders of magnitude different scale.
In Cambridge, the demand from surrounding areas is essentially infinite relative to the ability to increase supply – we are surrounded by the Boston metropolitan area, supported by numerous world-class universities and massive (though waning) job growth.
Austin is great, but it is not those things. Suffice it to say, I suspect relative demand in Cambridge is substantially higher than that in Austin – a veritable liberal enclave in a sea of red.
The idea that we SHOULD be destroying neighborhoods and quiet streets to build luxury units with the hope that perhaps, maybe the rate of increase might moderate to an unquantifiable degree is maddening.
Japan? Let’s be serious. Japan has a massively different structural accounting of property. “Unlike Western markets where homes appreciate in value, Japanese homes lose their structural value quickly and are often considered essentially worthless after 30 to 40 years.”
Just say no to profit boxes.
I think people that oppose more housing density in Cambridge have reasonable preferences, buildings do have impacts. Some people prefer living in more suburban places and that’s fine. But building more housing really does help housing affordability, and housing affordability is important. The idea that there are no tradeoffs to limiting housing supply is just not true.
The best way to quickly assess the research on a topic is to consult a literature review, like the one below, rather than cherry picking individual studies:
https://www.tandfonline.com/doi/full/10.1080/10511482.2024.2418044
Regarding the point about depreciation in Japan, why does older housing in Japan depreciate in value? Part of the reason is due to the fact that they build lots of new housing, so housing is less scarce. And the dynamic is similar here. Often here it’s the land that is appreciating in value, while the structure itself loses value, just like it does in Japan. The tax treatment is a little different in Japan, and there are different natural disaster risks and cultural preferences that play into it, but it’s not so dissimilar if you actually try to calculate the value of the land separate from the value of the structures here.
Cambridge and Austin don’t have to be identical. It’s the mechanisms that matter. Housing markets respond to supply constraints, and tighter geography makes those constraints more binding, not less. Plus, there are no walls around Cambridge. Everyone has to do their part (Somerville is). No one is asking or expecting Cambridge to do it alone. The geography issue is a red herring and a distraction.
The “300x” claim is rhetoric. Homes are added at the margin, and the question is whether more supply reduces price pressure.
Calling demand “infinite” just restates that prices are high due to constrained supply. Blocking new housing, including market-rate units, protects scarcity and pushes costs up across the board.
The choice is simple: allow incremental growth or guarantee continued price escalation.
Doing nothing just locks in rising home values for the already winners.
@Doug — you asked for evidence. Here it is: an NYU analysis of U.S. housing markets.
Their conclusion is straightforward: increasing supply lowers housing costs. That includes market-rate “luxury” housing, which reduces prices by freeing up older, more affordable units.
https://www.furmancenter.org/publication/supply-skepticism-revisited-update/
And one thing is undeniable: the housing crisis won’t be solved by doubling down on the policies that caused it. Do-nothing NIMBYism is how we got here.
@Frank- you love throwing around that NIMBY label, don’t you???
@Frank- You must not have read the actual study you posted because it says they only found only a 1-7% rent reduction, which is so small its wiped out by the margin of error.
Heres more data that can help you re-write your YIMBY gospels. Or maybe at least get you to stop promising that Cambridge is ever going to be affordable again.
Supply Constraints do not explain Housing Prices.
https://www.frbsf.org/wp-content/uploads/wp2025-06.pdf
@Doug Brown – There’s a large empirical literature here, and much of it is easy to find.
Here’s a paper showing that exclusionary zoning is a key driver of high housing costs in high‑demand markets like Cambridge:
https://www.nber.org/system/files/working_papers/w8835/w8835.pdf
Here’s a Cato Institute review arguing that zoning and land‑use regulation reduce housing supply, raise prices, and slow economic growth, and that zoning reform to allow more development is the most effective response to the affordability crisis:
https://www.cato.org/policy-analysis/zoning-land-use-planning-housing-affordability
Here’s a recent national, parcel‑level study of minimum lot size zoning, showing that restrictive zoning rules that limit density significantly raise prices and rents and increase racial and income segregation:
https://www.sciencedirect.com/science/article/abs/pii/S009411902500049X
For a concrete example (one of many) consider that after Minneapolis ended single‑family‑only zoning and other constraints, the city’s housing stock grew by about 12% from 2017–2022. As a result, average rents rose only about 1%, compared with a 14% rent increase in the rest of Minnesota over the same period.
https://www.pew.org/en/research-and-analysis/articles/2024/01/04/minneapolis-land-use-reforms-offer-a-blueprint-for-housing-affordability
I’ve heard this all before people. Investors will ALWAYS jack up the prices and in the modern economy they always want a return on their investment far faster than is reasonable. How much of the development has Venture Capital behind it, who want their money back within 1-3 years?
If we had followed “trends” there would be no housing left in Cambridge except the highest priced luxury stuff. There would be no neighborhoods, no community, just a bunch of corporate bozos running things.
Trying to find affordable housing for the 20,000 people that are on waiting lists for such in the city is just not possible at the same time as adding equal or greater number of luxury properties.
Comparing Cambridge to Austin is insane, might as well compare us to London UK.
@Cambridgejoe building new housing lowers price pressure on older units. Again, the law of supply and demand applies to Cambridge just as much as it applies to Austin and London.
@Jerry, 1) The first study you cite is 24 years old and quotes construction costs less than $100 per square foot. Got anything newer?? 2) Your second study is from the Cato Institute. Here’s what a quick web search returns on them : “Because of their strict adherence to libertarian principles, critics argue that their reports frequently start with a predetermined conclusion (i.e., that privatization and deregulation are always the best solutions), which can lead to selective data interpretation.” 3) Next you focus on the evils of minimum lot sizes. Cambridge doesn’t require minimum lot sizes- we got rid of them last year. Prior to that, our minimum lot size was 40x smaller than other communities in the Boston area (5000 sf in Cambridge vs 5 acres in Weston, for example). 4) We also allow multi-family housing across the entire City. Before we eliminated single family zoning entirely last year, multi-family housing was previously allowed in 94% of Cambridge. All you Yimbys want to quote the same old tired nonsense, when very little of it is actually relevant to our experience here in Cambridge.
@Gleb Building new housing doesn’t lower the price of older units when you tear down all the older units to build the new housing.