[colonCapitalDee]

I've never understood the induced demand argument. Yes, when goods get cheaper demand increases. Or, to put it another way, when we make our cities more affordable more people want to live there. What's the problem? Sure, induced demand means that the marginal increase of affordability is less than it may have been if demand remained constant, but a. affordability still increases, and b. the solution is just to keep adding more housing until things flatten off. I truly don't understand why this is controversial; do you not want people to have desirable things? The rational response to induced demand is "great, people actually want this. Build more".

[datadrivenangel]

It's push and pull.

If your goal is to decrease costs, the amount of supply needed may be surprising of latent / induced demand is very large. If NYC cost 1/4th the price to live there it would probably triple in population, so you'd need 40 million new units to get the costs down that much, and the price of the penthouse looking at central park would probably increase even if mean and median costs go down a lot. If a city is at the equilibrium point where supply meets demand, more housing may only keep prices flat for a large amount of new housing.

[rwarfield]

But the ultimate goal is never to decrease costs; it's to provide people housing.

[seanmcdirmid]

The problem isn't one of "we shouldn't build new housing", but rather the one of "are we going to see prices really fall after 10,000 new units of housing are built?"

It is only controversial if you really expect prices to fall when new housing is built (or to say, if you think the only solution is to build new housing and nothing else). Otherwise, the "building new housing" part isn't controversial at all.

[xnx]

Induced demand is a very popular fake idea and conversation ender. Giving people more of what they want is a good thing.