Remember my frustrating conversation with a legislator about there not being any guarantee that builders and landlords wouldn’t just pocket the difference if costs created by regulation went down? I pointed out that if costs went down and supply went up competition would ensue and prices would fall; it’s called the invisible hand. Well here’s a long quote from a story about the housing market in New York City.

Manhattan landlords offered concessions on 27 percent of all new leases signed in September, almost double the share from a year earlier, Miller Samuel and Douglas Elliman said. That’s helped keep rents relatively steady, with the monthly median falling only 0.4 percent to $3,334 after incentives are subtracted.

In Brooklyn, 20 percent of new leases came with concessions. But there, the deals weren’t enough to contain a slide in rents. The median last month dropped 5.6 percent, the most since March 2015, to $2,757.

There were 2,467 apartments listed for rent in Brooklyn at the end of September, which is 37 percent more than the monthly average for the last five years, Miller Samuel and Douglas Elliman said. Manhattan’s inventory of 7,363 units was 21 percent higher than the five-year monthly average. The vacancy rate in the borough climbed last month to 2.63 percent from 2.38 percent a year earlier.

The added supply eased the search for Garrett Barnard, who returned to New York last month after almost a year in San Francisco. The 27-year-old web designer set a rent budget of $4,500 for a two-bedroom apartment in the vicinity of Greenwich Village, to share with a roommate who’s attending New York University (emphasis mine).

There really isn’t much more to say, it’s right there in black and white. Not only to prices go down and landlords compete with landlords over tenants rather than tenants competing with tenants, but those tenants don’t need subsidies of any kind. When market prices fall, the ratio of lots of people’s income reaches the governments normative standard of 30 percent or less spend on housing as being “affordable.” While I don’t think this measure helps very much, it does drive out subsidy dollars. Part of what is frustrating is the ongoing disbelief here in Seattle that increased supply will lower prices, period. When those prices go down, more demand is absorbed by the market and subsidies for truly struggling families go a longer way.

This is not an oversimplification. But ideology and mythology die slow and painful deaths. What we need now is an analysis of what happens when market prices fall like they are in New York to waiting lists for subsidies. My guess is that the pressure on the housing authority and non-profit waiting lists drops, and more people are able to get into those apartments. But this won’t happen if we keep stifling supply with a growing list of impediments to building housing.