Making all housing more affordable: a six month update

Six months ago I made a post about creating affordability in the Burlington housing market and how, counterintuitively, allowing developers to build to the market (removing below market unit requirements) was the fastest way of getting this done. Since I used real tracked markets in my past post, I wanted to give an update with the 6 month data.

I used Denver metro as an example in my prior post because it illustrates the point well and the 2024 cousing numbers have come in. Since writing, the metro area has realized the effects of a huge boom in up-market apartment construction in prime locations. Basically, areas where the return on investment justifies building large, expensive new buildings. In 2024 the metro area added just shy of 20,000 units for a population of 3 million people, the equivalent of Burlington adding 1,600 units across downtown and SB. The micro economics theory of superior goods did the rest:

"...the supply deluge quickly overran every submarket, every age category of apartment and every apartment type, with older apartments and studios seeing some of the biggest increases in vacancy rates."

When all was said and done, rents dropped around 3.5% across the board (a few hundred dollars a month). Even price controlled housing saw decreases in rent, despite historically strong demand. This isn't unique to Denver, and it hasn't solved all of their problems, but they call it the "law" of supply and demand for a reason: Denver let developers build new supply in desirable areas and it caused anything not as new or desirable to fall in price.

So what: Hold your leaders, landlords, and Burlington NIMBYs accountable for the unaffordability of housing. Burlington is great and people want to live here. That's a good problem. If you want to make housing affordable we can either make Burlington less desirable or increase market housing supply. Building below market, income restricted housing is a nice thing to do for those who need it but it is a double edged sword for everyone: at the cost of affordability for some it causes developers to scale back projects and permanently underutilizes prime spaces for high density housing.

TL:DR It may not look nice on paper, but the only way to level the scale is to take your finger off. Housing is at the end of the day a market good and that market directly tracks supply and demand. Worse quality goods (looking at you Handy) become cheaper with softening demand, but only when there is a quantity of better available options.