4 ms·
I mean the bigger problem is that if amount of housing determined price, cities would be waaaaaaaaaaaaay cheaper than towns. Available housing may drive populat
by bananaface 6y ago
I mean the bigger problem is that if amount of housing determined price, cities would be waaaaaaaaaaaaay cheaper than towns. Available housing may drive population growth, pushing up the price, since for whatever reason people like to aggregate.
- AnthonyMouse 6y agoPrice is determined by supply and demand. There is more demand in cities so you need more supply to get the same price. People want to live near other people/businesses, but that's what cities are already, which is why there is already more demand there. There is a limit to the amount of housing you can add before you end up on the other side of the curve and prices start going back down again. There is also a matter of general policy. If hypothetically one city (and no others) added a lot of new housing so that the cost of housing there was lower there than in other cities then many people might move there, because they'd get to live in a city for less than it costs anywhere else, which would drive prices back up to near equilibrium. But if every city added housing then you wouldn't have that sort of migration because people could get into new housing without moving to another city, and then prices would decline everywhere.