>Imaginary graph of how price as a function of density would have to look But price is not a function of density! You think building more apartments in Cumber

>Imaginary graph of how price as a function of density would have to look But price is not a function of density! You think building more apartments in Cumberland, MD will increase prices, or decrease prices? I should point out: Cumberland is already a very densely built city. Its inner urban geography is not unlike Oakland. It just happens to be in a long, painful period of decline. So many of those buildings are empty. The answer is pretty obvious, here. Prices would likely drop. The "induced demand" is caused by economic success, not density itself. Plenty of dense cities have declined. (Cumberland isn't even that cold! And it has legal marijuana! And it's close to ski resorts! Eat your hearts out, armchair prognosticators!) >we find that indeed, the denser an area, the higher its house prices The data in this graph skew California cities upward because their suburbs are not part of their core urban areas — Concord/Walnut Creek is considered separate from the Bay Area, as is Dublin/Pleasanton — while cities outside of California are more likely to be connected. This is due to mountains intersecting dense urban geography in California, which doesn't happen in most other major cities (but Miami is constrained by swamps and New York does hit mountains to its north). But there are other unusual forces on housing prices in California (Proposition 13, construction difficulties), and without the major California cities the correlation becomes much weaker, before we even consider reverse causation. >No; I think the missing insight is that there’s some pool of geographically mobile Americans1 who are looking for new housing (or who might start looking if the right situation presented itself). These people have various combinations of preferences and requirements. One common pattern is to prefer any big city - they would be happy to live in Seattle, or NYC, or the Bay, if the opportunity came up. High decadal growth rates in Nashville, Charleston SC, Fayetteville AK, Boise, Jacksonville and Bend among other places put the lie to this. There are certainly "trends", but they aren't limited to big cities, and they don't really affect all big cities: the Los Angeles metro (of all places!) grew a measly 3% from 2010-20. Surely LA's high prices aren't primarily driven by a growth rate just a little higher than that of Pittsburgh. There might be some induced demand from certain kinds of housing construction in certain contexts, but this blog post is a long way from demonstrating any such effects. The most well-justified negative effect I've heard of from new housing construction is that businesses serving poorer populations are closed due to increasing commercial rents and competition from businesses serving the new clientele. And this can increase the cost of living for local residents, as well as causing job losses (even if employment statistics improve). What we do know is that sometimes people are worse off after construction happens (hence the uproar in the first place), and unfortunately I don't think this kind of 10000-feet analysis brings us closer to understanding why.