# Pig in the python

By [Brandon Donnelly](https://brandondonnelly.com) · 2026-05-24

housing-supply, new-york-times, san-francisco, austin, chicago, detroit, toronto, real-estate, development, supply, construction

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![](https://storage.googleapis.com/papyrus_images/e6605b0baa8066edd65f7c300e960b9b8c91d841476364843daba68d0b816772.png)

Here is a chart that we have all seen many times before. This one is from a recent New York Times opinion piece called, "[America Needs to Build More Housing](https://www.nytimes.com/interactive/2026/05/18/opinion/affordable-housing-america.html?unlocked_article_code=1.jlA.z9qB.F1TrY86focsA&smid=nytcore-ios-share)" and it shows the relationship between home prices (the price-to-income ratio) and houses built (average housing starts per 1,000 households). In this scatter chart, the four quadrants are as follows:

*   Cities that don't build a lot of housing and are expensive (San Francisco)
    
*   Cities that don't build a lot of housing but are still relatively affordable (Chicago)
    
*   Cities that build a lot of housing and are affordable ([Austin](https://brandondonnelly.com/apartment-rents-in-austin-are-down-22percent))
    
*   Cities that build a lot of housing but are still relatively expensive (Hilton Head Island)
    

This last quadrant has the fewest number of data points and a number of the locations are resort or second-home destinations, which have their own unique market dynamics. Similarly, the lower-supply cities, like Chicago and Detroit, have managed to maintain some degree of affordability by virtue of the fact that their population and economic demand haven't grown as quickly as in other cities.

But generally speaking, the correlation is as one would expect: more homes equals lower prices. It is, however, worth pointing out that not all homes are created equal. The cost and time required to build a low-rise, wood-framed house in the suburbs is not the same as building a high-density, reinforced-concrete tower in the city.

Still, we know that all forms of supply ultimately [improve affordability in a market](https://brandondonnelly.com/the-effects-of-new-housing-supply-in-switzerland). With this in mind, how might one describe Toronto today? We've been told we're in the midst of a housing crisis, and yet there are lots of available homes on the market, both to buy and rent. Indeed, it's a buyer's and tenant's market. So what's going on?

Well, it's important to keep in mind that a chart like this represents a long-term historical average and that building new housing generally takes a long time (too long, I might add). Right now, we could describe the Toronto housing market like the proverbial "pig in a python."

The market is in the midst of absorbing a huge influx of completed supply and, as our chart suggests, this is having a deflationary effect on home prices in the short term. However, once this pig gets digested, there's absolutely nothing next in the pipeline to digest, and according to basic economics, we know exactly what that will mean for the market.

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_Cover photo by_ [_Artem Labunsky_](https://unsplash.com/@labunsky?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText) _on_ [_Unsplash_](https://unsplash.com/photos/several-tower-cranes-c9p30E94OUU?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText)

_Chart via the_ [_New York Times_](https://www.nytimes.com/interactive/2026/05/18/opinion/affordable-housing-america.html?unlocked_article_code=1.jlA.z9qB.F1TrY86focsA&smid=nytcore-ios-share)

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*Originally published on [Brandon Donnelly](https://brandondonnelly.com/pig-in-the-python)*