4 ms·

> "if you add more supply, the price goes down" drum, it doesn't seem to hold true in reality. Plenty of empirical, academic studies show it does hold true. Se

by klipt 4y ago

> "if you add more supply, the price goes down" drum, it doesn't seem to hold true in reality. Plenty of empirical, academic studies show it does hold true. See: https://www.theurbanist.org/2021/06/02/new-round-of-studies-underscore-benefits-of-building-more-housing/ https://www.theurbanist.org/2021/06/02/new-round-of-studies-... But the numbers matter. Adding a tiny bit of supply is better than no supply, but won't help as much as a lot of supply.

komali2 4y ago
Sure, sometimes, yes, but like I said, the "build more and prices goes down!" is just too simple. https://shelterforce.org/2020/06/19/more-housing-could-increase-affordability-but-only-if-you-build-it-in-the-right-places-urban_housing/ https://shelterforce.org/2020/06/19/more-housing-could-incre... It also distracts from highly effective solutions, such as social housing: https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://www.npr.org/local/305/2020/02/25/809315455/how-european-style-public-housing-could-help-solve-the-affordability-crisis https://www.npr.org/local/305/2020/02/25/809315455/how-europ... Giving too much credence to an oversimplified "supply / demand" argument in the housing sector, which describes a human right, means that as soon as you mention socialized policies, people start complaining about "polluting" a "pure market supply / demand curve," despite the fact that supply / demand is just too simple a mechanism to describe a core human need, shelter. (It's such a core need it's literally the first thing one should seek in an lost-in-the-wilderness emergency, above food or even water). Anyway, what's it gonna be then? 100,000 new units at 3k/month? 200,000? When will the price automagically come down? And why is that better than the government simply buying out vacant units and giving them to the homeless, for starters, and then building blocks of housing at set rates?
- klipt 4y ago
  Look if the government offers to give me a free house I wouldn't say no, but the NIMBYs who oppose free market construction because it will cause a shadow on their zucchini garden will equally oppose government construction for the same reason.
- triceratops 4y ago
  I get that social housing is something you're particularly fond of. But in this case it would be enabling the bad behavior of NIMBYs. Why do you want to bail out people who are already rich with taxpayer money? Seems like the opposite of fair.
- zbrozek 4y ago
  Prices will come down when we build many millions of new homes. Sadly we are structurally unable to do it and unwilling to fix our regulatory environment to make it possible. Obviously that need is not uniformly distributed across the nation. California is probably around 4 million homes short all on its own.
  - komali2 4y ago
    Sounds like prices would also come down if the government built or bought housing and then set the prices. Seems more certain to me than waiting for market forces to decide it's gonna be profitable to build 4,000,000 units.
    - zbrozek 4y ago
      Why pick only one? We need to reduce barriers to construction, regardless of who is pursuing it.
    - crooked-v 4y ago
      When builder's remedy rules kicked in this month for California cities that didn't meet state planning requirements, projects got filed for upwards of 10,000 housing units just in the first week alone. It would have been higher, except that some cities tried to game the process even more by foot-dragging and so there are ongoing lawsuits to declare them out of compliance. Current market forces would love to build truly astounding amounts of housing. The problem in the way is NIMBYism and shitty local zoning and permitting.
      - zbrozek 4y ago
        10k sounds high to me. I'm aware of about 400-500 submitted so far in the SFBA (of which I filed 20), and I personally know folks preparing a total of another 700 or so. Did you find a comprehensive tracker with higher numbers? There's a bunch in SoCal, but their non-compliance kicked in a little over a year ago.
        4y ago
- mixmastamyk 4y ago
  Doesn't seem like you've read the article: https://archive.ph/w29ut https://archive.ph/w29ut
kristopolous 4y ago
I just looked over the article and the referenced papers and this is at best dubious. The presumption of the skeptics are that the housing is a closed system as opposed to outsiders moving in. They also don't look at second order causes or effects of the policy and the feedback cycles. Also these models in the linked papers are descriptive without controls, applied upon the data as eisigesis. What might be a better analysis would be divided cities such as these https://en.wikipedia.org/wiki/List_of_divided_cities https://en.wikipedia.org/wiki/List_of_divided_cities where there is otherwise free travel and look at the separate policies and see if the hypothesis can be supported without using neoclassical models - because they definitionally demand the conclusion to be supported. That's the real neoclassical critique - the framing of the analysis excludes confounding factors and then attributes price movements to exist within the confines of the model which forces the conclusion of the presumption of the analysis. For instance let's take this paper linked in the article: > I find that for every 10% increase in the housing stock within a 500-foot buffer, residential rents decrease by 1%. https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-Housing-Units-in-Your-Backyard-Raise-Your-Rents-Xiaodi-Li.pdf https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-... Because the 57-page analysis always presumes new building supply will definitionally affect price their only job then is to find out how much and why. They don't take the time to do say, instead of new building permits, a random scattershot around the city and compare results, or to apply the perimeter model to every possible combination and then demonstrate the effect has significance with respect to new construction through exhaustion. That's taken as presumed. The fundamental assumption is never demonstrated and no baseline is shown. 100 years ago, Pittsburgh, Baltimore and Cleveland were more expensive than San Francisco, Los Angeles, and Miami. The reason those positions have changed CAN be explained by these closed system supply and demand housing models in the same way that the Christian Bible has a logical working model to explain hurricanes. Also given that the author gives interesting reasons for a decrease in price - such as the noise and hassle of a large skyscraper being constructed across the street, or a decrease in the view from the high rise, it's hard to say that even that paper supports the overall idea of "more supply is lower prices" but instead "less attractive units yield lower prices"
- klipt 4y ago
  > outsiders moving in That's just the demand side of "supply and demand". You can lower housing prices by either: Increasing supply Or Decreasing demand For example Detroit decreased demand by having all their automobile manufacturing jobs move overseas. Now Detroit is relatively cheap. But obviously, most state governments do not view killing off jobs as a desirable solution because it shreds their tax base. If you want your state to prosper, you want more jobs, and that means you need more housing for the people working those jobs. The NIMBY "solution" is always to say that the housing should be built another city over, and that's why we have housing crises and ridiculous commutes.

by klipt 4y ago

komali2 4y ago

Sure, sometimes, yes, but like I said, the "build more and prices goes down!" is just too simple. https://shelterforce.org/2020/06/19/more-housing-could-increase-affordability-but-only-if-you-build-it-in-the-right-places-urban_housing/ https://shelterforce.org/2020/06/19/more-housing-could-incre... It also distracts from highly effective solutions, such as social housing: https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://en.wikipedia.org/wiki/Public_housing_in_Singapore https://www.npr.org/local/305/2020/02/25/809315455/how-european-style-public-housing-could-help-solve-the-affordability-crisis https://www.npr.org/local/305/2020/02/25/809315455/how-europ... Giving too much credence to an oversimplified "supply / demand" argument in the housing sector, which describes a human right, means that as soon as you mention socialized policies, people start complaining about "polluting" a "pure market supply / demand curve," despite the fact that supply / demand is just too simple a mechanism to describe a core human need, shelter. (It's such a core need it's literally the first thing one should seek in an lost-in-the-wilderness emergency, above food or even water). Anyway, what's it gonna be then? 100,000 new units at 3k/month? 200,000? When will the price automagically come down? And why is that better than the government simply buying out vacant units and giving them to the homeless, for starters, and then building blocks of housing at set rates?

klipt 4y ago
Look if the government offers to give me a free house I wouldn't say no, but the NIMBYs who oppose free market construction because it will cause a shadow on their zucchini garden will equally oppose government construction for the same reason.
triceratops 4y ago
I get that social housing is something you're particularly fond of. But in this case it would be enabling the bad behavior of NIMBYs. Why do you want to bail out people who are already rich with taxpayer money? Seems like the opposite of fair.
zbrozek 4y ago
Prices will come down when we build many millions of new homes. Sadly we are structurally unable to do it and unwilling to fix our regulatory environment to make it possible. Obviously that need is not uniformly distributed across the nation. California is probably around 4 million homes short all on its own.
- komali2 4y ago
  Sounds like prices would also come down if the government built or bought housing and then set the prices. Seems more certain to me than waiting for market forces to decide it's gonna be profitable to build 4,000,000 units.
  - zbrozek 4y ago
    Why pick only one? We need to reduce barriers to construction, regardless of who is pursuing it.
  - crooked-v 4y ago
    When builder's remedy rules kicked in this month for California cities that didn't meet state planning requirements, projects got filed for upwards of 10,000 housing units just in the first week alone. It would have been higher, except that some cities tried to game the process even more by foot-dragging and so there are ongoing lawsuits to declare them out of compliance. Current market forces would love to build truly astounding amounts of housing. The problem in the way is NIMBYism and shitty local zoning and permitting.
    - zbrozek 4y ago
      10k sounds high to me. I'm aware of about 400-500 submitted so far in the SFBA (of which I filed 20), and I personally know folks preparing a total of another 700 or so. Did you find a comprehensive tracker with higher numbers? There's a bunch in SoCal, but their non-compliance kicked in a little over a year ago.
      - 4y ago
mixmastamyk 4y ago
Doesn't seem like you've read the article: https://archive.ph/w29ut https://archive.ph/w29ut

kristopolous 4y ago

I just looked over the article and the referenced papers and this is at best dubious. The presumption of the skeptics are that the housing is a closed system as opposed to outsiders moving in. They also don't look at second order causes or effects of the policy and the feedback cycles. Also these models in the linked papers are descriptive without controls, applied upon the data as eisigesis. What might be a better analysis would be divided cities such as these https://en.wikipedia.org/wiki/List_of_divided_cities https://en.wikipedia.org/wiki/List_of_divided_cities where there is otherwise free travel and look at the separate policies and see if the hypothesis can be supported without using neoclassical models - because they definitionally demand the conclusion to be supported. That's the real neoclassical critique - the framing of the analysis excludes confounding factors and then attributes price movements to exist within the confines of the model which forces the conclusion of the presumption of the analysis. For instance let's take this paper linked in the article: > I find that for every 10% increase in the housing stock within a 500-foot buffer, residential rents decrease by 1%. https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-Housing-Units-in-Your-Backyard-Raise-Your-Rents-Xiaodi-Li.pdf https://blocksandlots.com/wp-content/uploads/2020/02/Do-New-... Because the 57-page analysis always presumes new building supply will definitionally affect price their only job then is to find out how much and why. They don't take the time to do say, instead of new building permits, a random scattershot around the city and compare results, or to apply the perimeter model to every possible combination and then demonstrate the effect has significance with respect to new construction through exhaustion. That's taken as presumed. The fundamental assumption is never demonstrated and no baseline is shown. 100 years ago, Pittsburgh, Baltimore and Cleveland were more expensive than San Francisco, Los Angeles, and Miami. The reason those positions have changed CAN be explained by these closed system supply and demand housing models in the same way that the Christian Bible has a logical working model to explain hurricanes. Also given that the author gives interesting reasons for a decrease in price - such as the noise and hassle of a large skyscraper being constructed across the street, or a decrease in the view from the high rise, it's hard to say that even that paper supports the overall idea of "more supply is lower prices" but instead "less attractive units yield lower prices"

klipt 4y ago
> outsiders moving in That's just the demand side of "supply and demand". You can lower housing prices by either: Increasing supply Or Decreasing demand For example Detroit decreased demand by having all their automobile manufacturing jobs move overseas. Now Detroit is relatively cheap. But obviously, most state governments do not view killing off jobs as a desirable solution because it shreds their tax base. If you want your state to prosper, you want more jobs, and that means you need more housing for the people working those jobs. The NIMBY "solution" is always to say that the housing should be built another city over, and that's why we have housing crises and ridiculous commutes.