5 ms·

It isn't just supply though, but essentially inequality. Chinese cities have completely different demographics than western cities. If you want to live somewher

• hellcow 8y ago
  > Housing isn't like manufactured goods where the marginal cost decrease the more you make. Since the more you build in one area the less available space there is. If you want to decrease cost you have to supply more space. This was probably true in 1750, but today you can build up. A 2000 SQ foot home can become a 40,000 SQ foot tower.
  • ClayShentrup 8y ago
    Exactly. We can increase density. There isn't unlimited land, but there aren't unlimited resources for any product.
  • fulafel 8y ago
    Marginal building cost per unit of space increases in this case.
    • dmoy 8y ago
      Right but sometimes the super expensive part is just the land it's built on. My unit has a construction cost that's significantly less than half of my unit's total value. The tiny one story ramblers across the street all sold for over a million a pop, but the houses were worth ~negative to the purchaser and got torn down and replaced.
• bufferoverflow 8y ago
  You supply more by building up. Or even down, but that's a lot more expensive.
• seanmcdirmid 8y ago
  Rents aren’t increasing that rapidly compared to real estate prices. There is a lot of slack supply as far as rentals go, to the extreme that many speculators don’t even bother renovating their properties for the rental market.
• zanny 8y ago
  Increasing density is optimal for everyone and the environment. The more spread out we are, the more inefficiencies there are in our infrastructure, in our environmental footprint, and in the inconvenience of getting places when they are further apart. Its purely cultural, but its burning trillions of dollars a year in maintenance, wasted time, and wasted potential.
  • njepa 8y ago
    I am not making a moral argument. When you build more housing you use the underlying resource, which is "space". That resource becomes more scares, so everything else being equal the next unit of housing is more expensive. That is why individual area in most cities never becomes more affordable by themselves. The way to get affordable housing isn't to supply more housing as such, but to supply it from a cheaper more available resources.
    • tuxracer 8y ago
      Unless the underlying resource you're referring to is airspace we can definitely increase the supply of housing (and in some cases quite dramatically) without using more of the underlying resource by allowing the construction of taller buildings.
      • njepa 8y ago
        The underlying resource is space. If you are in an open field that you own with no neighbors and no zoning then the first unit of space is you pitching a tent. The second unit is another tent slightly to the left. If you are in a city were land is expensive, a prior building might have to be razed, a new advanced one planned for years and you might block someone else's view, the unit of space is very expensive. So now you have razed the building, built a new larger one and added to the supply of housing, what happens to the next unit? Everything else being equal it gets even harder to produce. You can shift supply by e.g. changing zoning. Now you have more resources. But it doesn't change the equation, so eventually you might end up in an even worse situation were it is even harder do the same thing again. The even bigger problem however is that you don't necessarily get choose what should happen. Or maybe something is already shifting demand, like demographics.