Published Aug. 24, 2026at6:00am
It’s a tale as old as time. Legislators pass a law to make it easier to build homes, but nothing gets built because of factors beyond their control.
These factors are mostly financial — high interest rates, material costs, and labor expenses — making developers and investors hesitant to build, since they’re not sure they’ll make their money back. But one factor that can change this is rent. And rents are skyrocketing.
Developers predict that continued rent increases will trigger a building boom within two years, and they’re planning to get in on the action.
“If you can get in and start construction now, you can build your building for today’s costs and get tomorrow’s rents,” said Erik Hayden, CEO of San Jose-based development company Urban Catalyst. “That’s always a huge win.”