5 ms·

For every 10% increase in the housing stock, rents decrease 1% and sales prices also decrease within 500 feet. This seems weird to me. So if an area has nothin

For every 10% increase in the housing stock, rents decrease 1% and sales prices also decrease within 500 feet. This seems weird to me. So if an area has nothing but single story homes, and we raze every single one and replace it with two story homes that have twice the occupancy, it would only reduce rents by 10%? I'm also somewhat annoyed that NIMBYs everywhere, regardless of political preference, seem to ignore the elephant in the room of giant employee/education campuses. High home values need demand to support them, and that comes from lotsa people. Controlling campus size to me seems like the most straightforward way to control home prices, but then you lose out on that juicy, juicy revenue/spending.

zip1234 6y ago
I think you just thought up a new experiment. Should be tried in an area with high demand and nothing but single story homes.
- paxys 6y ago
  So.. most of San Francisco
epistasis 6y ago
Price elasticity is difficulty to measure, and usually only done for very small changes. It's likely that any linear approximation falls apart far before a 30% change, and is also highly dependent on the particulars of an area. Rent typically doesn't fall below the cost of providing and maintaining existing housing, or the cost of building new housing.
dublinben 6y ago
Restricting job growth would certainly be the most straightforward way to harm the economy of a city. A little too obvious for the NIMBY types who still want to benefit from a growing economy, but don't want the growing number of neighbors that come with it.
- omgwtfbyobbq 6y ago
  We don't have to restrict job/education growth, but we do need to upgrade services/infra/etc in proportion to the number of additional people. I think most cities see the revenue and think they'll sort everything out later, which may not be successful.
OrwellianChild 6y ago
You're generalizing from a single measurement. These studies measure the impact of the change of a single building in a neighborhood. The new building effectively becomes the "shiniest" and rises to the top of the desirability heap for the local area. Everything that existed previously is less shiny and lowers rents to compete. Your example of mass-redevelopment would likely have the opposite effect - it would be an inducement of demand - raising the value of the entire location to outside interests and raising rents.
- omgwtfbyobbq 6y ago
  After glancing at the paper, it might be specific to high-rises in densely populated areas as well. Generating single measurements is fine too, but I wish the article's author included that info instead of just referencing a small part of the paper.

zip1234 6y ago

I think you just thought up a new experiment. Should be tried in an area with high demand and nothing but single story homes.

paxys 6y ago
So.. most of San Francisco

epistasis 6y ago

Price elasticity is difficulty to measure, and usually only done for very small changes. It's likely that any linear approximation falls apart far before a 30% change, and is also highly dependent on the particulars of an area. Rent typically doesn't fall below the cost of providing and maintaining existing housing, or the cost of building new housing.

dublinben 6y ago

Restricting job growth would certainly be the most straightforward way to harm the economy of a city. A little too obvious for the NIMBY types who still want to benefit from a growing economy, but don't want the growing number of neighbors that come with it.

omgwtfbyobbq 6y ago
We don't have to restrict job/education growth, but we do need to upgrade services/infra/etc in proportion to the number of additional people. I think most cities see the revenue and think they'll sort everything out later, which may not be successful.

OrwellianChild 6y ago

You're generalizing from a single measurement. These studies measure the impact of the change of a single building in a neighborhood. The new building effectively becomes the "shiniest" and rises to the top of the desirability heap for the local area. Everything that existed previously is less shiny and lowers rents to compete. Your example of mass-redevelopment would likely have the opposite effect - it would be an inducement of demand - raising the value of the entire location to outside interests and raising rents.

omgwtfbyobbq 6y ago
After glancing at the paper, it might be specific to high-rises in densely populated areas as well. Generating single measurements is fine too, but I wish the article's author included that info instead of just referencing a small part of the paper.