> Increasing housing supply will absolutely decrease housing prices.

> That’s so obvious it’s nearly a truism.

And that is why Manhattan, due to having the most housing units per square mile, is one of the cheapest places to live in the US.

Since it's not, it is not a truism that merely increasing the housing supply will decrease prices. It takes more than that.

As long as you have excess people willing and able to buy $1M studios, every new studio will get snapped up. Prices can only begin to drop if you build so many that you exhaust the supply of people willing to pay $1M and the highest bid left is $900K.

Think of it as analogous to bond issuances. Just because the government issues more and more bonds the price won't drop as long as there are buyers to clear the price. Bond price only drops when they run dry of buyers at the higher price and must start accepting lower offers.