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Not necessarily. The housing market is very complex, and there is such a thing as induced demand - for example building lots more apartments in SF would make it

Not necessarily. The housing market is very complex, and there is such a thing as induced demand - for example building lots more apartments in SF would make it even more attractive for e.g. tech companies to locate, and so they would quickly be filled, without moving the price.

j7ake 3y ago
Any data to support this hypothesis?
imgabe 3y ago
Induced demand refers to highways. Do you know of any studies demonstrating induced demand for housing? As a counterpoint, look at all the empty cities China built in the middle of nowhere. According to the "induced demand" hypothesis, people should have materialized to occupy them, but that didn't happen. Cities currently prevent the market from meeting even the regular demand, let alone any induced demand. Housing isn't going to get cheaper by not building housing.
- Alifatisk 3y ago
  Aren’t those empty houses in China prone to break down? I think I remember seeing a video of a guy visiting one of those buildings and managed to kick through the wall and floor pretty easily.
  - egberts1 3y ago
    Yes, amongst others. https://www.reddit.com/r/gifs/comments/4nkkq7/apartment_buildings_in_china/ https://www.reddit.com/r/gifs/comments/4nkkq7/apartment_buil...
refurb 3y ago
It's not so simple. Some cities have too much housing. So much so the value of land goes down because of the house built on it. Sure building more housing, pushing prices down might induce more demand, but there are a dozen other factors (not in the control of the city) that also influence demand - job vacancies, crime levels, quality of schools, etc, etc.
jjk166 3y ago
Induced demand is just unsatisfied demand from parties not counted - if there are more people/companies that want to relocate to SF but can't because of a lack of available supply, that's just as much a shortage as for people and companies which wish to remain in SF.
johngladtj 3y ago
Induced demand does not exist, it is literally not a thing. The demand was there, the cost was just too high to satisfy it.

j7ake 3y ago

Any data to support this hypothesis?

imgabe 3y ago

Induced demand refers to highways. Do you know of any studies demonstrating induced demand for housing? As a counterpoint, look at all the empty cities China built in the middle of nowhere. According to the "induced demand" hypothesis, people should have materialized to occupy them, but that didn't happen. Cities currently prevent the market from meeting even the regular demand, let alone any induced demand. Housing isn't going to get cheaper by not building housing.

Alifatisk 3y ago
Aren’t those empty houses in China prone to break down? I think I remember seeing a video of a guy visiting one of those buildings and managed to kick through the wall and floor pretty easily.
- egberts1 3y ago
  Yes, amongst others. https://www.reddit.com/r/gifs/comments/4nkkq7/apartment_buildings_in_china/ https://www.reddit.com/r/gifs/comments/4nkkq7/apartment_buil...

refurb 3y ago

It's not so simple. Some cities have too much housing. So much so the value of land goes down because of the house built on it. Sure building more housing, pushing prices down might induce more demand, but there are a dozen other factors (not in the control of the city) that also influence demand - job vacancies, crime levels, quality of schools, etc, etc.

jjk166 3y ago

Induced demand is just unsatisfied demand from parties not counted - if there are more people/companies that want to relocate to SF but can't because of a lack of available supply, that's just as much a shortage as for people and companies which wish to remain in SF.

johngladtj 3y ago

Induced demand does not exist, it is literally not a thing. The demand was there, the cost was just too high to satisfy it.