You're conflating the demand curve with quantity demanded and the supply curve with quantity supplied. Even in Econ 101 we learn the difference. Induced demand

You're conflating the demand curve with quantity demanded and the supply curve with quantity supplied. Even in Econ 101 we learn the difference. Induced demand in traffic is also (mostly) a myth. The myth is perpetuated by the same ignorance of another government intervention: artificially low prices. Increasing capacity doesn't reduce congestion because the quantity demanded is so far beyond are ability to supply that it is impractical to meet it at those prices. To illustrate, consider Lamborghinis with prices capped at $1. At that price level, quantity demanded is so high that any increase in quantity supplied is immediately consumed. That doesn't mean that lamborghini is inducing demand by building more cars, because at market rates making more doesn't mean people consume more. And it can be demonstrated perfectly by the countries that do price their roads correctly: when they build more roads, it actually does reduce congestion. Adding more supply doesn't change the demand curve, it changes the equilibrium price. In all cases, supplying more means more is consumed. That doesn't mean demand curve has shifted, it means the quantity demanded has changed to reflect the new equilibrium. The price still drops, even with a higher quantity demanded. That is not induced demand, that's the same fucking supply and demand curve doing exactly what it always has done. Induced demand is where the demand curve changes in response to a change in quantity supplied. You have no evidence that that is happening, because it isn't, regardless of whether it is in Silicon Valley or Indianapolis. Demand curves for housing are largely the result of income factors: people can make more money in SV. If SV companies keep paying workers more and more, the demand curve is going to keep shifting. It's not caused by housing growth, that's idiotic. And because the demand shift is not caused by housing, restricting housing only makes it worse.