3 ms·

That would increase the costs, but so long as the demand (at that cost) outweighs the supply, there will be an incentive to keep building. If there currently ar

That would increase the costs, but so long as the demand (at that cost) outweighs the supply, there will be an incentive to keep building. If there currently aren't enough homes to satisfy the demand, then the reason why there aren't enough homes isn't that the costs are too high. Another way to say this is that supply for housing is currently consumed by buyers who can afford the extra cost for solar panels. Until the supply is high enough to where buyers who can't afford the extra $Xk for solar panels are needed to buy the available new housing, the cost of solar isn't a major factor in the housing crisis. It could eventually be a major factor, but until more housing is built, there are other factors in play that impact the lack of housing more. If it is death by a thousand cuts, the problem is the thousand cuts, not any single cut in particular.

mlyle 4y ago
> Another way to say this is that supply for housing is currently consumed by buyers who can afford the extra cost for solar panels. Until the supply is high enough to where buyers who can't afford the extra $Xk for solar panels are needed to buy the available new housing, the cost of solar isn't a major factor in the housing crisis. You're presuming there's no elasticity in supply. That even if pricing goes up there's not any additional units built.
- mbreese 4y ago
  > You're presuming there's no elasticity in supply. That even if pricing goes up there's not any additional units built. Maybe I wasn’t as clear as I could have been. I’m not making any assumptions about elasticity. If supply increases, I’m saying that the extra cost of solar doesn’t matter (yet) so long as the pool of buyers is large enough that the supply can be consumed by buyers who can afford the extra cost for solar. It isn’t until either the supply gets bigger or the buyer pool gets smaller that the cost of solar would have an impact (when the entire supply couldn’t be bought by people with the means to afford the extra cost of solar). At that point you’ll see more pricing pressure to finally drive prices downwards (if that ever happens).
  - mlyle 4y ago
    > Maybe I wasn’t as clear as I could have been. I’m not making any assumptions about elasticity. If supply increases, I’m saying that the extra cost of solar doesn’t matter (yet) so long as the pool of buyers is large enough that the supply can be consumed by buyers who can afford the extra cost for solar. Simple econ stuff: add a $10k per-unit "tax" to producers; the cost is borne by the suppliers and consumers according to the elasticity of the supply and demand curves, and quantity decreases. https://www.reviewecon.com/wp-content/uploads/2018/04/excise-tax-impact-on-market-microeconomics_orig.gif https://www.reviewecon.com/wp-content/uploads/2018/04/excise... The shaded regions are, of course, slightly different when you're imposing a cost on suppliers that results in some value to the buyer. But the intersection of the supply and demand curves moves left, which means quantity falls. The only case that quantity doesn't change is if there's no elasticity. https://www.reviewecon.com/excise-taxes https://www.reviewecon.com/excise-taxes
    - mbreese 4y ago
      I’m not very well versed in econ, so thanks for the links and help. Wouldn’t this all assume balanced supply/demand? Which isn’t what we have in CA. I guess you’re saying that demand isn’t elastic? It seems like an odd term to use to describe a situation where demand >>> supply. It’s not like demand is fixed, but it is so far beyond supply on the curve that it acts as a constant?
      - mlyle 4y ago
        > It seems like an odd term to use to describe a situation where demand >>> supply. It’s not like demand is fixed, but it is so far beyond supply on the curve that it acts as a constant? Demand equals supply at the price in a market economy (in the long run). If the demand is high and there's an absolute shortage, sellers are incentivized to raise prices. Then the intersection between the supply curve and demand curve set the price and quantity. The slopes of the two curves may be shallow, though. There may be a large demand for housing at nearly any price (inelastic demand), and supply may not react too much to price (inelastic supply). How elastic the curves are sets what happens if you add a fixed cost in: who bears the cost, and how much the quantity changes.

mlyle 4y ago

> Another way to say this is that supply for housing is currently consumed by buyers who can afford the extra cost for solar panels. Until the supply is high enough to where buyers who can't afford the extra $Xk for solar panels are needed to buy the available new housing, the cost of solar isn't a major factor in the housing crisis. You're presuming there's no elasticity in supply. That even if pricing goes up there's not any additional units built.

mbreese 4y ago
> You're presuming there's no elasticity in supply. That even if pricing goes up there's not any additional units built. Maybe I wasn’t as clear as I could have been. I’m not making any assumptions about elasticity. If supply increases, I’m saying that the extra cost of solar doesn’t matter (yet) so long as the pool of buyers is large enough that the supply can be consumed by buyers who can afford the extra cost for solar. It isn’t until either the supply gets bigger or the buyer pool gets smaller that the cost of solar would have an impact (when the entire supply couldn’t be bought by people with the means to afford the extra cost of solar). At that point you’ll see more pricing pressure to finally drive prices downwards (if that ever happens).
- mlyle 4y ago
  > Maybe I wasn’t as clear as I could have been. I’m not making any assumptions about elasticity. If supply increases, I’m saying that the extra cost of solar doesn’t matter (yet) so long as the pool of buyers is large enough that the supply can be consumed by buyers who can afford the extra cost for solar. Simple econ stuff: add a $10k per-unit "tax" to producers; the cost is borne by the suppliers and consumers according to the elasticity of the supply and demand curves, and quantity decreases. https://www.reviewecon.com/wp-content/uploads/2018/04/excise-tax-impact-on-market-microeconomics_orig.gif https://www.reviewecon.com/wp-content/uploads/2018/04/excise... The shaded regions are, of course, slightly different when you're imposing a cost on suppliers that results in some value to the buyer. But the intersection of the supply and demand curves moves left, which means quantity falls. The only case that quantity doesn't change is if there's no elasticity. https://www.reviewecon.com/excise-taxes https://www.reviewecon.com/excise-taxes
  - mbreese 4y ago
    I’m not very well versed in econ, so thanks for the links and help. Wouldn’t this all assume balanced supply/demand? Which isn’t what we have in CA. I guess you’re saying that demand isn’t elastic? It seems like an odd term to use to describe a situation where demand >>> supply. It’s not like demand is fixed, but it is so far beyond supply on the curve that it acts as a constant?
    - mlyle 4y ago
      > It seems like an odd term to use to describe a situation where demand >>> supply. It’s not like demand is fixed, but it is so far beyond supply on the curve that it acts as a constant? Demand equals supply at the price in a market economy (in the long run). If the demand is high and there's an absolute shortage, sellers are incentivized to raise prices. Then the intersection between the supply curve and demand curve set the price and quantity. The slopes of the two curves may be shallow, though. There may be a large demand for housing at nearly any price (inelastic demand), and supply may not react too much to price (inelastic supply). How elastic the curves are sets what happens if you add a fixed cost in: who bears the cost, and how much the quantity changes.