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Your notion of “supply and demand” doesn’t allow for the predicates to the problem: new buildings are regulated through zoning and permits. While life might be

by dfee 9y ago

Your notion of “supply and demand” doesn’t allow for the predicates to the problem: new buildings are regulated through zoning and permits. While life might be simpler with your model, it doesn’t fit reality well. Here’s a decent analysis of the California situation with mismatched supply and demand and the headache that goes along with the state’s governance: http://www.latimes.com/business/la-fi-home-prices-20170725-story.html http://www.latimes.com/business/la-fi-home-prices-20170725-s...

MRSallee 9y ago
I'm not sure why you presented this as contradictory to the post you replied to. > High prices (demand) attracting speculation (supply) should drive down rents (prices) ... [but they're not] Should? Then why aren't they? > new buildings are regulated through zoning and permits.
- tw04 9y ago
  Because it is contradictory. Sure, in a vacuum where there's infinite land available and no rules, supply would meet demand. In a vacuum Antarctica would be a great vacation destination with amazing views of the ocean. In reality Antarctica is freezing cold and difficult to get to. And in reality there is a shortage of places to build new housing at an affordable price in either location mentioned.
  - cgmg 9y ago
    Are you claiming most of that shortage is from physical constraints?
  - MRSallee 9y ago
    If you think that is contradictory to the original poster, you might think they said something I'm pretty sure they didn't.
notatoad 9y ago
>new buildings are regulated through zoning and permits. yes, and AirBnB has built a business off ignoring those pesky laws.