Its counter intuitive at first glance, but in my area (west coast) it is actually the renter-friendly voters who scare off development. Too many rental protections lead to developers opting for development in red-er pastures.

Gas prices go up and down 10% all the time

Because that is a liquid commodity.

i see what you did there

It doesn't work that way because if house prices dropped 10% people would just buy bigger/nicer houses. Houses today are so luxurious today, granite countertops, ducted A/C, beautiful wood floors its just become normal.

The fact that people still associate stone kitchen counters with "luxurious" is a holdover from 50 years ago when homes were actually affordable. When houses cost $25k, a $50 stone was a substantial expense. Now it doesn't amount to anything. Nothing about the modern American home market is in any way influenced by the marginal cost of slightly nicer materials.

The great irony is that high density housing dramatically increases the value of the real estate, which is the actual investment. A single family home is in fact a wealth sink - you're constantly maintaining it and even with great effort it will probably be an undesirable building to live in within a few decades. While someone may pay to live in the building you currently occupy, at some point someone is going to buy the land to do something else with it. Like imagine if you owned an acre of downtown Manhattan with only a ranch style house on it - the skyscrapers around you are not going to lower your property value.

There is concern that lower rent places will allow lower income individuals to reside in these communities, and that will lead to undesirable conditions like crime, despite the fact that if rent were lower than a person of a given income level would have more cash in pocket and thus be less inclined to things like crime, and nearby affordable housing means local businesses could find people to work for lower wages, lowering the cost of living for everybody.

If people invested in making their communities desirable places to live, genuinely increasing the value of their real estate, rather than relying on scarcity to increase the value of their house, everyone would be better off.

I'm banking on the middle-ground: commercial real-estate being re-built/re-zoned into medium and high density housing

It would appease pretty much everyone: struggling downtowns with existing infrastructure can start to revitalize, former commercial landlords start seeing revenue again, and NIMBYs dont have to worry about new neighbors

Gas prices were unusually low during the 1990's and that's when the SUV exploded in popularity. Look at an inflation-adjusted chart and you'll see a big dip between 1990 and the early 2000s.

Source: https://www.energy.gov/eere/vehicles/fact-915-march-7-2016-a...