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You're making the claim that demand for housing is infinitely inelastic, which just isn't the case. If something causes the price of all housing to rise, people
by jessriedel 10y ago
You're making the claim that demand for housing is infinitely inelastic, which just isn't the case. If something causes the price of all housing to rise, people will be forced to devote a larger fraction of their income to housing.
- sokoloff 10y agoYes. Especially if the thing that causes rental house prices to rise also causes alternatives to rental housing to rise...
- branchless 10y agoNo you are wrong, that's not how prices are set. Supply in urban centres is already below demand leading to bidding, setting the price by affordability. We just had this in the UK. The government put up costs for landlords who all said rents would rise. They fell because people have less money due to inflation in other cost areas.