Then you would have the problem Ian Sutherland mentioned, every piece of land in the City would appreciate in price to match the incremental density.
We have had more apartments come available in the past two years then in the past twenty. Vacancy rates have increased top nearly 3% yet rental prices have shot up more than any time in recent history as well.
Clearly more density is only making affordability worse.
I think it's more complicated than that.
Limiting new development/density *can* cause large price increases; California communities have had to limit density/development for decades due to a voter initiative passed years ago, and that is certainly a primary driver of housing cost increases.
However, simply increasing supply isn't truly a silver bullet to maintain affordability. Rising construction and land costs can push up the price quite a bit, so new product (whether sold as condos or rented) coming on to the market can definitely be more expensive than older product. However, over time, any new product built *today* has the potential to become more affordable over time; a condo built in 2001 will generally be less expensive to purchase or lease than a brand new condo with similar specifications. Based on this, a large injection of supply 20-25 years ago could have helped with general affordability in Victoria *today*, but - on the rental side at least- there was no purpose-built rental built at the time.
Increasing supply *today* can help affordability *tomorrow*, but the positive effective of increased supply today could be tempered if population growth exceeds projections.
Edited by Kapten Kapsell, 07 June 2021 - 10:52 AM.