4 ms·
How can someone think that? How can increase of supply increase prices? What's the logic behind that perception?
by anovikov 3y ago
How can someone think that? How can increase of supply increase prices? What's the logic behind that perception?
- raldi 3y agoThey mistake correlation (new buildings going up as housing prices increase) and causation.
- AlanSE 3y agoAlso, builders want to build high-margin houses, not low-margin houses. Also, high-margin housing gets advertised, low-margin housing does not.
- Aunche 3y agoPeople see newly constructed "luxury" housing. They also see techies that can outbid them on rent. They mix up cause and effect and assume that it's the luxury housing that's bringing in all the techies rather than vice versa.
- bitsage 3y agoDevelopment can sometimes increase demand for previously blighted urban areas. A few years ago, I used to live in expensive re-purposed lofts in an area of Boston metro which was in disrepair in the 90s. There’s a similar story for Bushwick and Williamsburg in NYC. However, by the time an area has become popular, restricting development will only hurt rent affordability. I guess some would like to prevent their neighborhoods from becoming popular in the first place though.
- s1artibartfast 3y agoThe logic basically comes down to concepts of induced demand, demographic shift, and gentrification. A community can improve on average while some people see less of that benefit.