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Of course the cost goes up. Densification does not lead to lower prices, because it increases wealth. People in denser areas make more money, because businesses
by mlsu 3y ago
Of course the cost goes up. Densification does not lead to lower prices, because it increases wealth. People in denser areas make more money, because businesses in denser areas are more productive, because density is efficient and causes people to be more productive.
This is a good thing.
Affordability is not cost. The problem that we have now is that supply of housing is artificially constrained by bad policy, which allows some groups to capture the surplus. It is broadly not a coincidence that the groups that capture the surplus are the very same that set policy.
It seems to me that "some forms of densification are allowed pretty much everywhere" is doing a lot of work for you. Can you elaborate? How easy is it to build an apartment building "anywhere?" [1] is an example of what I mean, but you can google "housing supply shortage USA" if you want general statistics. The conclusion is pretty much unanimous: it is immensely difficult to build anything, anywhere, which has caused a massive shortage in the supply of housing. Again: density, solution.
If we allow buildings to be built, a developer will gladly come in and build buildings. Someone building a house for someone else to live in is, in general, a very good thing. Everyone participating in this conversation lives in a house that someone else built for them and made a profit in so doing, and it's a good thing, because that allows us to work and create value.
[1] https://twitter.com/cafedujord/status/1692713611683066073 https://twitter.com/cafedujord/status/1692713611683066073
- seanmcdirmid 3y agoIf that were true, then people in big dense urban areas would be paying less share of their income than in other areas. But I don’t think that’s true at all, at least for those making at or below the median. Dense cities are more desirable to live in, but that induces more demand, so even though the cities generate more wealth, the equilibrium between supply and demand still skews to people wanting to pay more of their income to bid on a limited supply of housing (even if that supply is larger, more demand is simply induced). We should allow more building (and denser building) in popular cities, but we shouldn’t do that blindly thinking that it would somehow make housing more affordable. You can google housing supply shortage for basically any country with a good economy, not just the USA. The only way to get around it is somehow suppress demand (low paying jobs in Berlin 20 years ago, or a declining population in Japan).