hacktehplanet

> But I have a hard time to understand how increased supply would not have a downward effect on prices.

It does, if that is the only thing that happens. If land owners or existing home owners willingness to sell, prospective renters or buyers willingness to buy, or any number of different things also change then those effects can overshadow an increase in supply. As they frequently do.

Starbucks keeps opening new locations but that doesn't say much to the effect that the price of a cup of coffee will decrease.

The laws of supply and demand only says that an increase in supply will decrease price if everything else remains the same. Since that isn't the reality in housing markets there is nothing in the laws of supply and demand saying prices can't increase more by building more than they otherwise would have.