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NYC’s demand for housing is more than an order of magnitude greater than Tucson. If you want to argue that increasing supply doesn’t matter, you need to compare

by raldi 9y ago

NYC’s demand for housing is more than an order of magnitude greater than Tucson. If you want to argue that increasing supply doesn’t matter, you need to compare two examples with similar demand.

umanwizard 9y ago
That is exactly my point. I don't see why we should expect San Francisco to turn out differently from New York. Building more housing will allow more people to move there, which will drive growth, which will in turn attract even more people...
- raldi 9y ago
  We could debate how this works, but since neither of us is an economist, that would be as silly as a couple of non-scientists arguing about climate change -- when the overwhelming majority of scientists are all saying the same thing, just listen to the scientists. In this case, an overwhelming majority of economists are saying that increasing the supply of housing in our cities would bring prices down. SF's Chief Economist: http://www.sfhac.org/wp-content/uploads/2014/11/Ted-Egan-Presentation.pdf http://www.sfhac.org/wp-content/uploads/2014/11/Ted-Egan-Pre... California's legislative analyst's office: http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.pdf http://www.lao.ca.gov/reports/2015/finance/housing-costs/hou... The Obama White House: https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Housing_Development_Toolkit%20f.2.pdf https://www.whitehouse.gov/sites/whitehouse.gov/files/images... Even if they're all wrong, and we increase the supply of housing by 100,000 units and prices stay the same, that's 100,000 fewer families that get displaced.
  - fapjacks 9y ago
    Don't put science up on a pedestal. That's the magic: There is no priesthood. Anybody can do (and talk about, argue about) science.
    - fapjacks 9y ago
      Bizarre.
  - conanbatt 9y ago
    The first link was a delight to read! It does mention that it has a strong elasticity for demand. Particularly higher for medium+ income. Since its very hard to measure future elasticity of demand (i.e. SF now known to be expensive, if housing was built agressively and it became "famously cheaper" demand could be even higher) its possible that prices wouldnt go down much. The correct answer to the OP's concerns is that the goal is not to lower rents, but to increase the total utility: you do that by providing more and better housing. New buildings at same rate for the same amount of people is still better. And naturally, same rate and more people is also better. There's no doubt that San Francisco needs a massive shock to the supply curve.
- JumpCrisscross 9y ago
  > Building more housing will allow more people to move there I live in New York. Nobody moves here because they want to live in a nice building that happens to be in New York. They move to New York and then find housing. Demand is largely unaffected by new supply in large cities. Also, I live in the Flatiron neighbourhood. A bunch of new development has held my rent flat for 3 years now. My building tried raising rents; I met a potential tenant looking at a unit on my floor. She went to the new luxury building down the street for his $50 more. My building, facing the new competition, dropped their ask by $100.
- imtringued 9y ago
  The people are attracted by the jobs which are attracted by the massive amount of commercial real estate compared to the much smaller amount of residential real estate.

by raldi 9y ago

NYC’s demand for housing is more than an order of magnitude greater than Tucson. If you want to argue that increasing supply doesn’t matter, you need to compare two examples with similar demand.

umanwizard 9y ago

That is exactly my point. I don't see why we should expect San Francisco to turn out differently from New York. Building more housing will allow more people to move there, which will drive growth, which will in turn attract even more people...

raldi 9y ago
We could debate how this works, but since neither of us is an economist, that would be as silly as a couple of non-scientists arguing about climate change -- when the overwhelming majority of scientists are all saying the same thing, just listen to the scientists. In this case, an overwhelming majority of economists are saying that increasing the supply of housing in our cities would bring prices down. SF's Chief Economist: http://www.sfhac.org/wp-content/uploads/2014/11/Ted-Egan-Presentation.pdf http://www.sfhac.org/wp-content/uploads/2014/11/Ted-Egan-Pre... California's legislative analyst's office: http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.pdf http://www.lao.ca.gov/reports/2015/finance/housing-costs/hou... The Obama White House: https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Housing_Development_Toolkit%20f.2.pdf https://www.whitehouse.gov/sites/whitehouse.gov/files/images... Even if they're all wrong, and we increase the supply of housing by 100,000 units and prices stay the same, that's 100,000 fewer families that get displaced.
- fapjacks 9y ago
  Don't put science up on a pedestal. That's the magic: There is no priesthood. Anybody can do (and talk about, argue about) science.
  - fapjacks 9y ago
    Bizarre.
- conanbatt 9y ago
  The first link was a delight to read! It does mention that it has a strong elasticity for demand. Particularly higher for medium+ income. Since its very hard to measure future elasticity of demand (i.e. SF now known to be expensive, if housing was built agressively and it became "famously cheaper" demand could be even higher) its possible that prices wouldnt go down much. The correct answer to the OP's concerns is that the goal is not to lower rents, but to increase the total utility: you do that by providing more and better housing. New buildings at same rate for the same amount of people is still better. And naturally, same rate and more people is also better. There's no doubt that San Francisco needs a massive shock to the supply curve.
JumpCrisscross 9y ago
> Building more housing will allow more people to move there I live in New York. Nobody moves here because they want to live in a nice building that happens to be in New York. They move to New York and then find housing. Demand is largely unaffected by new supply in large cities. Also, I live in the Flatiron neighbourhood. A bunch of new development has held my rent flat for 3 years now. My building tried raising rents; I met a potential tenant looking at a unit on my floor. She went to the new luxury building down the street for his $50 more. My building, facing the new competition, dropped their ask by $100.
imtringued 9y ago
The people are attracted by the jobs which are attracted by the massive amount of commercial real estate compared to the much smaller amount of residential real estate.