By what mechanism do the producers keep prices high if the "lots of competition" is constantly undercutting them and adding new supply to replace anything the colluding subset tries to withhold from the market?
By what mechanism do the producers keep prices high if the "lots of competition" is constantly undercutting them and adding new supply to replace anything the colluding subset tries to withhold from the market?
The zoning restrictions often prevents new supply.
Cost cutting while shopping for expendable commodities does not result in a long term drop in quality of life in the same way that cost cutting while selecting your residence could.
Apartment landlords don't undercut each other. They raise rents in lockstep and then offer "specials" like a month off (amortized) that lower initial out-of-pocket costs without affecting the base rent, which gets raised on subsequent lease renewals to make up the difference. The only option to avoid this is moving every year (instability being clearly great for community /s) since corporate landlords will not negotiate rates.
If the evidence seems to disagree with your theory, maybe your theory has to change?