[jessedhillon]

I agree, in a single instance it sounds like the obvious thing to do. But it's not obvious that the cumulative effect of putting commercial and residential bidders against each other at a city scale will lead to desirable outcomes for society. In fact, what's obvious is that it won't.

[ajmurmann]

It's not obvious at all that it won't. There is only that much demand for commercial space.

[jessedhillon]

You know, a lot has been written about the effect of cryptocurrency mining on GPU prices.

If you were a gamer entering the market in 2018, you would've seen prices several hundred dollars in excess of what your counterpart from six months earlier paid. Games hadn't gotten, say, 50% better. Performance hadn't either. You and your peer are going to have roughly identical experiences. The cost of your gaming experience is going up due to reasons uncorrelated with the value delivered to you.

The point is that pure market forces are volatile and unpredictable, in the extreme. It's up to you if you want to make the case that housing, being a commodity essential to the proper functioning of a society (unlike gaming), doesn't require at least some protection from pure demand forces. IMO most people would find it obvious that this would be undesirable.