alt Hacker NewsI've been told repeatedly by people who have a vested interest in maintaining high housing prices that supply and demand don't work at all, ever, for any reason, and high prices are no reason to build more housing. How do I reconcile these facts?!?
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If demand for cars skyrockets then you (eventually) get more cars at the same price coz the manufacturer can just make more.
If everybody wants to buy up land because "god isnt making it any more" you get less land at an even higher price which makes it even more attractive as a store in value.
So no, supply and demand doesnt really work for land the way it works for everything else.
Land needs to be taxed a lot to create enough supply and in California prop 13 quite deliberately did the precise opposite of that.
If the alleged people actually said this, and they wanted to "maintain high prices", then why would they oppose more building? If they believed "supply and demand don't work at all", then more supply wouldn't hurt their goal of maintaining high prices.
If demand picks up because supply increases, you will reach the previous equilibrium even with more supply. It isn’t rocket science, there is a price people are willing to pay to live in SD, and the market will keep gravitating to that price unless demand is somehow limited. The price people are willing to pay can even increase as density makes brings in things (eg culture, job opportunities) that make the city more desirable (eg see Hong Kong).
Easily.
Many of those people have a correct observation in that new construction is just luxury housing, which is obviously unaffordable for people struggling with rent.
What they fail to miss is that for every luxury unit that's built and is occupied, some well-off person moved into it... And out of a shitty, cheap unit that's now on the market.