This video was recently circulated on the SFBARF mailing list and elsewhere suggesting that building more houses in SF wouldn't lower the market price of housing. There are so many methodological problems with the analysis in this video that I don't know where to start. But you gotta start somewhere.
First of all, this Calvin Welch fellow is talking about sale prices of houses which is not the same as rental prices obviously. Both are interesting but which one you care about depends on your perspective. It would be wrong for us to make any conclusions about rentals from the scant information given about condo prices, for example. The actual relationship between rental prices and sale prices is complicated and not historically consistent (e.g. this paper). Calvin is also using condo price FROM ZILLOW.COM as a proxy for the overall price of housing. He makes no attempt to show that Zillow prices are a representative of non-Zillow listings or non-condo listings or that condos are big fraction of the market. To add insult to injury, there are obviously many factors that affect the prices of condos in the real world other than construction of new condos. Calvin did not normalize prices for increases in demand over the same time periods, made no mention of inflation or of the prevailing rental vacancy rate or particular events (e.g. launch of AirBnB) that may have affected prices without changing the size of the housing stock.
OK, so let's proceed on the assumption that he's right and condo prices don't go down just because new stock is built. It's a plausible enough argument methodological problems notwithstanding. Still - what about rental prices? Does anyone have data they can share? Also, Calvin claims that we have a fixed amount of land in the Bay area but this is patently false. There are many previously non-residential areas that have been "up-zoned" to residential (e.g. Dogpatch) or could be upzoned in the future. Far less industrial space is required in the area now than in the past and we could reclaim that land for people to live on. We can also convert short buildings into tall ones, claiming more airspace for human life. These are all ways of effectively creating "new land" that Senor Welch ignores without comment. Moreover, Calvin also mentioned that only 1/4 of units for sale units new construction (calculated how?) and claims that it is unsurprising that changes to the new housing stock don't change prices. And he's right, it is not surprising that in a relatively large city like SF (about 800k residents) there would be many more old houses than new ones. But he neglects the future effects of building new housing units today. How will we increase the number of units for sale in 2030 if we build 10,000 new units today? How will we change the rental vacancy rate in 2030 if we build 10,000 new units today. I am not saying I know the answers to these questions, but only that he is asking the wrong ones and misleading us with overly simplistic analysis.
The unfortunate truth about the complexity of modern life is that it is easy for people to impress us with hollow statistics. We should demand better and ask harder questions. Even if Mr. Welch turns out to be right, I don't think that the take-away from this video would be that we might be "spinning our wheels" by advocating for more housing. Mr. Welch claims on several occasions that the reason that new building doesn't lead to decreased prices is entrenched interests (i.e. oligarchy). This exactly what we've been trying to disrupt at SFBARF -- by showing up for meetings and representing interests that are not entrenched (i.e. those of renters).