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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

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.
- kristopolous 4y ago
  Again, this is all way too constrained and that critique suffers the same problem. If we used that as advocacy then we should steamroll Central Park in Manhattan and replace it with apartments. That certainly would lower the prices in the same way that demolishing Stanford and putting in apartments there would. The narrow vision of "supply and demand" ignores the obvious problems in those examples because it cannot accommodate for things outside its narrow scope. If Central Park was steamrolled and prices dropped, then the model would be hailed as predictive of the price drop because the supply increased. It doesn't see the park and doesn't understand the reality. It also ignores say, how the quality of public schools can affect housing prices, access to, speed and reliability of mass transit, recreational and cultural areas, cleanliness of the streets and the unhoused, perception of crime, availability of parking... These important aspects all get ignored. Deciding policy without them is disastrous The behavior of the market is complicated and new buildings with an increase in supply doesn't guarantee a price reduction. In practice, that should be sought through market regulation and policy - controlling of airbnb units, or units sitting idle as investments, or being withheld from the market ... Those problems do not magically fix themselves and as you pointed out, self interested actors in a free market did not make 1,000 flowers bloom in Chattanooga or Cleveland. There's consequences for basing public policy strictly on neoclassical economics and pretending like nothing else matters. Intentional holistic policy like they do in Amsterdam or Copenhagen is a good counterexample. Look at those places in the 1970s versus today. We need more housing and lower prices but doing the first does not guarantee the second and the second can happen without the first. They're related but mostly independent problems that need separate attentions.

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.

kristopolous 4y ago
Again, this is all way too constrained and that critique suffers the same problem. If we used that as advocacy then we should steamroll Central Park in Manhattan and replace it with apartments. That certainly would lower the prices in the same way that demolishing Stanford and putting in apartments there would. The narrow vision of "supply and demand" ignores the obvious problems in those examples because it cannot accommodate for things outside its narrow scope. If Central Park was steamrolled and prices dropped, then the model would be hailed as predictive of the price drop because the supply increased. It doesn't see the park and doesn't understand the reality. It also ignores say, how the quality of public schools can affect housing prices, access to, speed and reliability of mass transit, recreational and cultural areas, cleanliness of the streets and the unhoused, perception of crime, availability of parking... These important aspects all get ignored. Deciding policy without them is disastrous The behavior of the market is complicated and new buildings with an increase in supply doesn't guarantee a price reduction. In practice, that should be sought through market regulation and policy - controlling of airbnb units, or units sitting idle as investments, or being withheld from the market ... Those problems do not magically fix themselves and as you pointed out, self interested actors in a free market did not make 1,000 flowers bloom in Chattanooga or Cleveland. There's consequences for basing public policy strictly on neoclassical economics and pretending like nothing else matters. Intentional holistic policy like they do in Amsterdam or Copenhagen is a good counterexample. Look at those places in the 1970s versus today. We need more housing and lower prices but doing the first does not guarantee the second and the second can happen without the first. They're related but mostly independent problems that need separate attentions.