<story><title>‘Build More Housing’ Is No Match for Inequality</title><url>https://www.citylab.com/equity/2019/05/housing-supply-home-prices-economic-inequality-cities/588997/</url></story><parent_chain><item><author>mabbo</author><text>&amp;gt; It mainly leads to building high-end housing in desirable locations&lt;p&gt;Which is perfectly fine! It still works, because houses do not have intrinsic price tags. They have intrinsic ordering of values, but their price is determined by what people are willing to pay.&lt;p&gt;Line up every person in the city in order of how much they&amp;#x27;re willing to spend on a home. Do the same with the homes available. Face the two lines across from each other. Everyone will buy a home nearby to what is across from them right now. Building a whole bunch more houses on the top end of the house scale doesn&amp;#x27;t leave those mansions empty, it just drives the mid-range homes further down the scale.&lt;p&gt;Supply shorter causes those further up the scale of &amp;quot;willing to spend on a home&amp;quot; to have only modest homes as options (what&amp;#x27;s across from them). At the same time, it pushes less and less desirable homes (often ones 2 hours commute from work) in front of those less able to afford homes.&lt;p&gt;If you want to argue that the divide between rich and poor is growing, and it&amp;#x27;s a problem, oh heck yeah I&amp;#x27;m on board for that argument. But conflating the housing shortage problems with that allows the landlords to keep getting richer.</text></item></parent_chain><comment><author>dragonwriter</author><text>&amp;gt; Line up every person in the city in order of how much they&amp;#x27;re willing to spend on a home.&lt;p&gt;This is the “city as a closed universe” fallacy. What you actually have to do is line up every potential purchase of a home (which may be more than one per buyer) in the city by any person in &lt;i&gt;the world&lt;/i&gt; in that order.&lt;p&gt;Which is why you can&amp;#x27;t move the needle very much in a high demand region by increasing supply in any way that is practical over any reasonable period [0]; there&amp;#x27;s usually a lot of available demand that must be filled before you see a perceptible price drop.&lt;p&gt;[0] at least before considering the effect that population density outpacing service and infrastructure scaling can have on desirability, which isn&amp;#x27;t usually the effect people are looking to leverage to reduce price, though making the city into a hellhole &lt;i&gt;does&lt;/i&gt; have that effect.</text></comment>
<story><title>‘Build More Housing’ Is No Match for Inequality</title><url>https://www.citylab.com/equity/2019/05/housing-supply-home-prices-economic-inequality-cities/588997/</url></story><parent_chain><item><author>mabbo</author><text>&amp;gt; It mainly leads to building high-end housing in desirable locations&lt;p&gt;Which is perfectly fine! It still works, because houses do not have intrinsic price tags. They have intrinsic ordering of values, but their price is determined by what people are willing to pay.&lt;p&gt;Line up every person in the city in order of how much they&amp;#x27;re willing to spend on a home. Do the same with the homes available. Face the two lines across from each other. Everyone will buy a home nearby to what is across from them right now. Building a whole bunch more houses on the top end of the house scale doesn&amp;#x27;t leave those mansions empty, it just drives the mid-range homes further down the scale.&lt;p&gt;Supply shorter causes those further up the scale of &amp;quot;willing to spend on a home&amp;quot; to have only modest homes as options (what&amp;#x27;s across from them). At the same time, it pushes less and less desirable homes (often ones 2 hours commute from work) in front of those less able to afford homes.&lt;p&gt;If you want to argue that the divide between rich and poor is growing, and it&amp;#x27;s a problem, oh heck yeah I&amp;#x27;m on board for that argument. But conflating the housing shortage problems with that allows the landlords to keep getting richer.</text></item></parent_chain><comment><author>pmart123</author><text>This is definitely a good point. Let’s think of two scenarios.&lt;p&gt;1. Stick a lot of affordable housing in building, but math works since the developer can make money selling the high priced units.&lt;p&gt;2. Increase total housing supply through less restrictive zoning, meaning more developers are building units they plan to sell at list price.&lt;p&gt;Scenario one is only possible if some people are paying too much for housing, and the people that are squeezed the most are the middle class. Scenario two probably means that the poorest group is displaced.&lt;p&gt;New York has been attempting scenario one. I’m not sure if SF has tried to accomplish either route, leading to the worst case scenario.</text></comment>