&gt; If 1 million people live in a city, and you add 10 million more apartments, would that lower the price of each apartment? Of course, because you increased the supply.<p>Short term, sure.<p>Long term, less clear. More people living in the city = more demand for various goods and services = more businesses competing for space with residences <i>and</i> more jobs and, thus, housing demand = higher market clearing prices for housing.<p>&gt; Adding housing absolutely decreases the average price of housing. This is supply and demand.<p>You are assuming that the you can increase the supply without affecting demand. This is naïve.