We just ran a massive experiment, called Covid-19, which caused about 10% of San Francisco residents to leave the city.
This is not quite the same thing as an immediate increase in supply, but instead a large drop in demand. The net result is the exact same thing: a large increase in the vacancy rate, which resulted in a rapid and dramatic decrease in median rents.
It’s a terrible example though as the people with the most liquid financial situation are the ones that left. The ones that remained can’t even afford to rent they U-Haul to get out of Dodge. They’re stuck treading water and at best will get Newsom to buy their vote^W^W^Wpay their back rent.
It’s a terrible example of housing policy and how we want the city to develop and mature, but it is still a perfect demonstration of how excess supply drives down prices.
Has the decrease at about 22% at one point. Lowest rents since 2013. They seem to have gone back up somewhat since, but that is a big adjustment and reflects excess supply.
This is not quite the same thing as an immediate increase in supply, but instead a large drop in demand. The net result is the exact same thing: a large increase in the vacancy rate, which resulted in a rapid and dramatic decrease in median rents.