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This is incorrect. The impact of supply on housing prices has been shown over and over again in the real estate economics literature. The concept of induced de
by spikels 7y ago
This is incorrect. The impact of supply on housing prices has been shown over and over again in the real estate economics literature.
The concept of induced demand in real estate is quite different than in transportation. The theoretical mechanism involves increased amenities induced by higher density above and beyond normal supply and demand interactions. It is likely to be a much smaller effect if it even exists at all. There is no solid research showing it is a significant in practice.
Here’s a recent presentation on the issue:
https://appam.confex.com/appam/2018/webprogram/Paper25811.html https://appam.confex.com/appam/2018/webprogram/Paper25811.ht...
- AnthonyMouse 7y ago"Induced demand" leads to wrong conclusions in general, analogous to confusing the local maxima produced by a hill climbing algorithm with a global one. It's possible to build enough of anything to satisfy all the demand, even roads. The real problem with roads is the opportunity cost. There are alternative, better ways of satisfying that demand -- like building more housing, so people can live closer to where they work and don't have to drive as far. So what's the alternative, better way of satisfying demand for housing? Nobody has one? Then we ought to build more housing, even if we have to plow through some induced demand (which may or may not even be present) in order to satisfy the full demand.
- swant56 7y agoI’m glad people understand that building more housing does NOT work
- swant56 7y agoNot really. Induced demand applies to housing.