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> That would definitely create a lot of value ("fixing the problems"), but it needs not tank real estate values at all The most basic, fundamental laws of econ
by nordsieck 7y ago
> That would definitely create a lot of value ("fixing the problems"), but it needs not tank real estate values at all
The most basic, fundamental laws of economics are the relations between supply, demand and price.
If you keep demand relatively constant and dramatically increase supply, price will fall.
Indeed, because of the close substitutability of owing and renting, the only way to get rents lower is to also decrease property values.
- zozbot234 7y agoWhy do you assume that demand would remain constant despite a large increase in density? More density tends to mean more amenities and more services like mass transit, hence raising demand.
- nordsieck 7y ago> Why do you assume that demand would remain constant despite a large increase in density? Sure - induced demand is a thing. But induced demand is a secondary effect: people move to a place because the cost of living is now lower; it can slow the decrease in rent, but it can't stop it More importantly, it's completely possible to just out-build induced demand. There are simply a limited number of people who want to live in SF (although admittedly, that number is quite a bit larger than the number who are currently living there). So the more nuanced relation is: when supply dramatically outpaces demand, price will go down. Just to make sure we're both on the same page, I'm advocating increasing the number of bedrooms in the city by a minimum of 1-2 orders of magnitude.