The idea of employing upzoning to make urban areas more affordable is based on the principle of supply and demand — a fundamental tenet of economic theory. Incentivize developers to build more housing units thereby increasing the supply. As the additional supply begins to sate the demand for housing, the price of housing should eventually fall. Essentially, deregulate zoning laws, allow capitalism to do its work and everyone benefits. An idea so simple, how could it fail?
But where is there evidence to support this theory? Pick any city around the world and you will find that these densely populated urban areas remain far more expensive than their less densely populated surroundings. And there is no evidence that Cambridge is any different. Every new unit we build is more expensive than the last. Prices continue to go up.
So how is this possible? Is housing an exception to the rule of supply and demand? One explanation is that density directly affects demand. Increasing the density of a city makes it more attractive to businesses, developers, investors, and people in general. Thus making the deregulation of the housing market a big win for capitalism and a big loss for consumers.
Sam Christy / Elm Street, Cambridge
A stronger
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Really? We still coming up with theories on how supply and demand do not apply when building housing?! In 2026? Of course building more housing across large area lowers prices. San Diego just set a record with declining rents after a glut of construction https://www.kpbs.org/news/economy/2026/03/27/san-diego-rents-declined-more-than-19-of-nations-top-20-markets-following-surge-in-supply In March, Austin showed the same https://www.pew.org/en/research-and-analysis/articles/2026/03/18/austins-surge-of-new-housing-construction-drove-down-rents
We are lucky to live in Cambridge with high-paying jobs, good services, and great neighbors. People are already working here, and our housing has not kept up. This is what driving prices up, not phantom “density does it by itself somehow”.
This gets causality backwards. Cities aren’t expensive because they built housing. They built housing because demand is already high.
Does the author think that prices really be lower if we had less housing? That doesn’t make sense. The real question is whether adding supply keeps prices lower than they otherwise would be. The answer, backed by a lot of evidence, is yes. It slows rent growth. The author asks for evidence, then ignores it.
“New units are expensive” isn’t an argument. New units are always expensive, but they ease pressure by keeping higher-income renters out of older, cheaper units. And this lower costs. That effect is well documented.
Prices are high because demand exceeds supply. Restricting supply doesn’t reduce demand. It just drives prices higher. That’s basic economics, and the empirical evidence supports it.
This is an important question. There are several points to consider.
1. The question we want to answer is “when housing is built, do prices go down *relative to what they would have been without the housing*?” We cannot answer this question by observing that in 2022, there were X units of housing and prices were $Y, and in 2024, there was this much more housing and prices changed. A lot of other things changed between 2022 and 2024, and the effects of building housing are mixed with everything else.
2. In fact, there is enormous evidence that housing markets follow supply and demand. If you compare across cities, for example, cities that built more have seen housing prices fall more.
3. If we could build more housing and prices wouldn’t fall, that would be even better! This sounds counter-intuitive, but think about it terms of anything else that we build. If apple growers were to grow more and more apples, eventually people wouldn’t buy all of them and prices of apples would fall. If people open more and more barber shops, then there are only so many haircuts that people need, and the barber shops wouldn’t be able to stay in business. In those cases, growing more apples or opening more barber shops would stop making people better off, since it would be producing things that people don’t need that much.
So if housing prices don’t fall after more housing is built, that means that we haven’t yet run out of demand for housing, at least not in cities like Cambridge that are hubs of education and industry. It means that there is a lot of room to build more housing and keep on making people better off.
4. Don’t confuse new units with old units. The newest housing will be the most modern and in the best condition. So it would naturally be the most expensive. Yet providing it makes older housing cheaper. Look at what happened during covid when the chip shortage led to a shortage of new cars. Used cars went way up in price. Likewise if we don’t build new housing, then people will bid up the price of old housing.
Dense cities aren’t expensive because they built housing. They’re expensive because they haven’t built enough.
Scarcity drives prices up. The only durable solution is more supply.
City planners and housing experts agree, which is why places like Cambridge are pursuing zoning reform.
Opposition to development effectively preserves high real estate values, benefiting wealthy homeowners while excluding everyone else. People who gained from the status quo have little incentive to change it.
The NIMBY approach to affordability, in practice, is to keep doing what caused the shortage in the first place.
It is astonishing that some still argue housing markets do not follow basic supply and demand, despite overwhelming evidence.
Cities across the US have reduced housing costs by building more housing. Even minimal research would make this clear.
It is time to stop repeating NIMBY talking points.
This has nothing to do with NIMBY.
“Cities across the US have reduced housing costs by building more housing. ” Not true. Name several cities that have reduced housing costs.
The key thing is that Cambridge does not need more people. It is already too dense and our municipal systems are being overwhelmed.
Cambridge taxes have risen all out of proportion to inflation. It has forced out many in the economic middle class. Every indication from the spendthrift city council argues that this will continue. It is not a good recipe for a well run city that wises to be diverse.
The last point: why not move up those who work for the city and need housing, to the top of the wait list for low income housing… and take off all of those names of people who don’t work for the city and don’t live here. Isn’t that the fairest way to do things?
Look at a housing cost map and a population density map side by side and you will see they’re almost identical. Density doesn’t just follow demand, it also raises the floor for who can afford to invest. Bigger buildings mean bigger capital requirements, which squeezes out small landlords and hands the market to PE firms. That’s not trivial, small landlords consistently charge lower rents than institutional owners. So “build more” as a blanket solution ignores the ownership question entirely. More supply is only part of the story if that supply ends up concentrated in the hands of groups with the most incentive to extract maximum rent.
If we are replacing small local landlords with corporate investors and developers who sue the city to get rid of inclusionary zoning, you aren’t going to make housing more affordable, it might get a lot worse. Now if the project is going to be more affordable than the general housing supply that’s a different story.
We are always in black and white. Its the state of politics. Of course supply makes a difference. Especially supply that meets the highest demand. That said its not unreasonable for residents to have concerns about parking and density. Unfortunately the person mad about a a little to big project in a low density neighborhood with no parking is now against all housing. This is the state of politics locally and nationally. I dont oppose all bike lanes but think some are unnecessary and the benefits dont outweigh the cost and impact. I know multi fans zoning preceded by zero parking has reasonable concerns but we absolutely need more supply. So does the region. Just wish every issue did not have to be a poke the bear or some political retaliation. Example eliminating shot spotter. Maybe I am alone somewhere in the middle but I hope not.
@Old Boy. The claims aren’t supported by evidence.
“Nowhere has reduced housing costs by building more.” Flatly incorrect. Austin saw rents fall roughly 5–10% after a construction surge. Minneapolis kept rents roughly flat post-upzoning while comparable cities saw increases. Supply isn’t a cure-all, but it reliably reduces upward pressure on prices.
“Cambridge is too dense.” That misdiagnoses the problem. Cambridge is a major job center (MIT, Harvard, Kendall) in a region that underbuilds housing. When supply lags behind job growth, prices rise. You don’t get a strong economy without housing the people who sustain it. Infrastructure strain reflects planning choices, not an argument for freezing growth.
“Taxes are driving out the middle class.” No. The primary driver is housing scarcity. Any middle class person will tell you that. Constrained supply inflates property values and rents. Plus, new housing expands the tax base. blocking it worsens the problem.
“Prioritize city workers for affordable housing.” That likely violates fair housing rules and sidelines other vulnerable residents. Public housing isn’t meant to function as an employment perk.
The issue isn’t “too many people.” It’s too little housing for a high-demand city. Restricting supply doesn’t preserve affordability or diversity. It undermines both by creating a city only the rich can afford