[guiolo]

> Some well-meaning progressive people who don't understand supply and demand are fooled by such arguments, [...]

For the laws of supply and demand to be accurate they require that only quantity and price changes. The housing market in popular areas, other than being inelastic, tends to suffer from demand shifts. There is nothing in economics saying that building more housing can't result in neighborhoods being less affordable.

[tlb]

Can you explain the mechanism by which building more housing causes neighborhoods to become less affordable?

[eldavido]

There's a popular meme that it makes an area more desirable, therefore increasing property prices. And there's probably some truth to that.

What this fails to consider is that, if a bunch of people are moving to an area, they have to go SOMEWHERE, so it's not a "here vs. there" question, it's "which here will it be?" Proponents like to believe they can somehow put people "elsewhere" without realizing the poor always get screwed when rents rise, and they absolutely will rise everywhere in an uncontrolled and chaotic fashion, if more supply doesn't come to market.

[Kalium]

For plenty of people, so long as the answer is "not near me" then the details are irrelevant. You can see the policy mess that results.

[eldavido]

Typical collective action problem. Everybody wants to move here but nobody wants to house them.

At some point the business community just has to pull a Bezos and be like, OK guys, fine, you don't want us here, we're packing up, bye. Then see what happens when all those pension and infrastructure payments come due. Hilarity will ensue.

[CodeWriter23]

The same mechanism that fills the new capacity realized by increasing the number of lanes on a highway. Utilization increases to fill available capacity.

That’s the fallacy here, that more housing is going to meet or exceed the demand hyper growth-focused companies will continue to produce for employees.

[guiolo]

As I said, a shift in demand. Yes, if you increase supply and if nothing else changes there is a decrease in price. But if you increase supply and the area therefor e.g. becomes more popular among people who earn more money or there is more investment in that area, then you have a shift in demand which can lead to an area becoming less affordable. [0]

[0] https://opentextbc.ca/principlesofeconomics/chapter/3-2-shif...

[manfredo]

I think it's the other way around. Cities become more desirable to live in (thus causing housing prices to rise). Developers see a new market and capitalize on it.