"Induced demand" does exist, but not in a normal market. It exists in markets where positive externalities are not fully priced in. When you have a road without

"Induced demand" does exist, but not in a normal market. It exists in markets where positive externalities are not fully priced in. When you have a road without congestion charges, then building a second lane to expand capacity just adds more "free shit" to the local infrastructure. The demand for "free shit" is infinite, giving rise to the appearance that supply is driving demand, when it is actually the price that is biased towards demand structurally exceeding supply. This doesn't apply to housing at all, because the landlord would simply price in all positive externalities, such as the free road infrastructure mentioned above. The "free shit" would go straight into the pocket of the landlord, which would stimulate supply and discourage demand. The problem is that these places are constrained by geographics, local politics and the willingness of previous land owners to move out so you can't just build more.