[wahern]

Induced demand is predicated on the consumer not having to internalize the costs, which is the case for the poster child of induced demand--non-toll, public freeways.

The problem in the Bay Area isn't induced demand, almost by definition. Rather, the demand already exists, and that's precisely why costs keep skyrocketing despite very low supply growth. The only way out of the situation other than by increasing supply is to cut demand to live there by, e.g., bombing tech headquarters and unleashing roving bands of human culling robots so that people would have less motivation to move here.

An example of actual induced demand in the Bay Area might be homeless housing in San Francisco. Since circa 2005 SF has built enough units of homeless housing to house every homeless person enumerated in the circa 2005 homeless census. But the number of homeless on the street has stayed the same--which is to say, the total number of homeless has approximately doubled since that time, w/ half now living in city-built housing. Arguably this suggests that there may be something like a set carrying capacity of unsheltered homeless in the city, and no matter how many units of housing you provide, you'll always have that number of homeless on the streets.[1] Though, this is obviously just a conjecture. People argue vociferously about the origins and motivations of the homeless in SF. I certainly won't claim to have any concrete answers. But at least such a conjectured phenomenon would be consonant w/ the theory of induced demand.

[1] To be clear, the induced demand in this scenario is demand for the free housing units, not spots on the sidewalk.

[majormajor]

> Rather, the demand already exists, and that's precisely why costs keep skyrocketing despite very low supply growth.

If the costs are skyrocketing doesn't that mean demand has been going up, not that it already existed at these levels?

How many more tech offices are in SF now than fifteen years ago? Has the city's commercial growth policies been considering in sync with their residential growth policies? Or have they let the one fan the flames of the other? They should've preemptively bombed the tech headquarters, to tweak your suggestion. ;)

But my money says that even if they had unleashed a bunch more residential construction fifteen years ago, it would've only been accompanied by even more business and commercial growth. Coastal hub cities have a fundamental demand aspect with how cheap cross-country (or even global) travel is these days - there is a lot of built-in appeal that's going to attract people there, even if only for second homes or investment housing, etc, and keep a lot of pressure on the price floor.

[wahern]

I'm sure demand has also been going up, though I don't know how to disentangle that from inflationary effects--same number of people wanting to live here, but w/ access to more wealth. In any event, it only drives home the point that the relationship between demand, supply, and price isn't something you can just will away, like an alternate universe Jane Jacobs applying Marxist economics.

AFAIU, San Francisco has built more market and non-market housing than any other city in the Bay Area, despite being geographically quite small. Unfortunately, that's a relatively low bar in the context of the Bay Area considering so many cities just refuse to up-zone anything, or approve projects in up-zoned areas.

[olliej]

I disagree here as I've seen numerous examples of autonomous robots blocking sidewalks and crossings such that people with disabilities are unable to pass. Also who gets to win the contract? Are they using locally made small batch robots? If not, why not?

Have we consider the use of organic cullers instead?