Matt Yglesias has a long post on that question, recommended albeit gated.  Matt’s take is hard to summarize, so I will provide a somewhat different view, though one that is still pro-YIMBY though with a different slant.

Without loss of generality, we can assume that sometimes “more building” raises rents and other times lowers them, or rents stay the same.

Let’s say there are no big “ideas externalities” from a new NYC apartment building, and as we put more of those buildings in, the rents fall somewhat. Furthermore, say we keep on building until those rents in NYC equal those in Nashville. There is gain on the inframarginal units of construction, but at the final margin the new building in NYC has about the same social value as the new building in Nashville.  The inframarginal gains are the relevant ones.

Now who gets those inframarginal gains?  If land is the truly scarce factor, as NIMBY critics suggest, landlords get a lot of them!  Nothing against that, I love landlords.  Still, that is a slightly different story from what you hear from the YIMBYs.  Landlords don’t get all of those gains, because the land scarcity constraint is precisely what is being relaxed.  But the available evidence seems to indicate you need to build a lot before rents fall much.  So landlords probably receive a healthy share of those new gains.  Rents may fall, but not by that much.  And so the gains for new urban entrants (who did not wish to migrate at the old rent levels) are correspondingly meh.

Again, let me repeat I love YIMBY and I love landlords.  You should too.

Alternatively, say you keep on building and the new residents bring lots of information externalities to the urban area — ever been to Seoul?  They have built like crazy and it is still quite expensive, all the more so in fact.  By building more, they made the land more valuable.  Good for them.  (NB: The biggest beneficiaries may be the rest of Korea, and K-Pop consumers around the world, not Seoul residents.)

Now who do you think reaps most of those gains?  Under standard NIMBY assumptions, I would think it is mainly the landlords.  Which is not to deny the residents receive some gains from increased product diversity in Seoul (good Thai food there now, etc.), and other non-primary effects.

It’s not all the landlords.  But still, the knowledge externalities make land in Seoul, in economic terms, more scarce.  The landlords will do really well.

When I read or hear YIMBYs, I often feel they have a public choice model of politics, slanted toward recognizing the influence of the landlords and homeowners, but not a comparable model of factor price incidence to boot.  They somehow want the lower rents and the positive information externalities both at the same time.  That to me seems unlikely.  And so it is harder to redistribute income away from landlords than you might think.

I again would stress that all the YIMBY changes are Pareto improvements here.  But the extreme remedies suggested by the Georgists, which to be clear I do not favor, are quite explicable to me.