3 ms·
When there's a shortage of luxury units, rich people grudgingly bid up the low-end units because they still have to live somewhere. That's why low-end units her
by erik_seaberg 7y ago
When there's a shortage of luxury units, rich people grudgingly bid up the low-end units because they still have to live somewhere. That's why low-end units here have higher prices than luxury units in other places.
- slg 7y agoOr they decide to live in a different neighborhood, suburb, city, state, or country. That is the primary flaw with all this discussion of theoretical housing markets. Housing markets are not closed systems. Demand is not fixed. People regularly enter into or exit specific housing markets all the time due to changes in prices which prevent these pricing changes from completely flowing through the entirety of the market. It doesn't matter how expensive housing in California gets, most "rich" people will move away before they spend a few thousand dollars a month on SRO housing.
- erik_seaberg 7y agoIt's pretty hard to build housing that only rich people would refuse to live in. In practice it's the working poor who end up commuting from Tracy and Morgan Hill because everything else was outbid, and that will continue until we legalize the housing glut the market is crying out for.