Again, this is all way too constrained and that critique suffers the same problem.
If we used that as advocacy then we should steamroll Central Park in Manhattan and replace it with apartments. That certainly would lower the prices in the same way that demolishing Stanford and putting in apartments there would.
The narrow vision of "supply and demand" ignores the obvious problems in those examples because it cannot accommodate for things outside its narrow scope.
If Central Park was steamrolled and prices dropped, then the model would be hailed as predictive of the price drop because the supply increased. It doesn't see the park and doesn't understand the reality.
It also ignores say, how the quality of public schools can affect housing prices, access to, speed and reliability of mass transit, recreational and cultural areas, cleanliness of the streets and the unhoused, perception of crime, availability of parking...
These important aspects all get ignored. Deciding policy without them is disastrous
The behavior of the market is complicated and new buildings with an increase in supply doesn't guarantee a price reduction. In practice, that should be sought through market regulation and policy - controlling of airbnb units, or units sitting idle as investments, or being withheld from the market ...
Those problems do not magically fix themselves and as you pointed out, self interested actors in a free market did not make 1,000 flowers bloom in Chattanooga or Cleveland. There's consequences for basing public policy strictly on neoclassical economics and pretending like nothing else matters.
Intentional holistic policy like they do in Amsterdam or Copenhagen is a good counterexample. Look at those places in the 1970s versus today.
We need more housing and lower prices but doing the first does not guarantee the second and the second can happen without the first. They're related but mostly independent problems that need separate attentions.
> The behavior of the market is complicated and new buildings with an increase in supply doesn't guarantee a price reduction. In practice, that should be sought through market regulation and policy - controlling of airbnb units, or units sitting idle as investments, or being withheld from the market ...
I'm down with taxing needlessly vacant houses to encourage them to be sold or rented out. I think a Land Value Tax would help tremendously.
But that's not a solution alone. San Francisco has created many more jobs than it has built housing units for, and the only way to make up that shortfall is building more.
To put it simply, you can't house 100 new workers in 1 apartment no matter how much you regulate AirBnbs.
Of course, you also won't house 100 new blue collar, lower-working class, or entry-level families in 100 expensive McMansions or luxury condos either. Because they can't afford it.
But if that's all the builders want to make for the profit margins, and that's all the NIMBYs and zoning regulations will allow, that's what we get. Not just in the wealthy Bay Area. You see that in parts of the country with much lower median salaries.
It's a difficult, multi-faceted problem. "Just let the market sort it out" is a markedly overly-simplistic solution. One that doesn't work well if at all except for very simple problems involving simple fungible commodities with a wide supply-side availability. Real estate obviously doesn't fit that description.
My real advocacy is we should use the same level of eminent domain effort we took when we cut cities in half to build freeways out to winding suburbias full of giant malls to center life around driving and transform the cities again.
It takes a lot of bravado and gumption to seize control of destiny like that and I think Americans at least have collectively lost that kind of imaginary.
The modern apartment buildings are endemic of it. They are the closest thing you could get to the Jetsons; 30 feet of parking with the first floor of residency literally in the sky. They look like concrete fortresses with iron bars protecting parked cars. The only way in and out of the urban prison is to use your car as a key. If you're on foot, it's some side door.
These things are extremely hostile to community building and offer the same clinical separation and isolation narrative of the redlined suburb of the 1950s. It's the lonely by design individualist approach to cosmopolitan living and personally I find it repulsive.
Better, friendly buildings, fewer cars, more green space, this is all possible. Tokyo pulls it off pretty nicely. We just need to exercise the political power to make it happen
> Of course, you also won't house 100 new blue collar, lower-working class, or entry-level families in 100 expensive McMansions or luxury condos either. Because they can't afford it.
That’s sort of true, but not really true in the sense of the broader market. If you build 100 high end housing units, some of them will be occupied by people currently living in lower end housing, which will free up that housing for lower-income people.
If we used that as advocacy then we should steamroll Central Park in Manhattan and replace it with apartments. That certainly would lower the prices in the same way that demolishing Stanford and putting in apartments there would.
The narrow vision of "supply and demand" ignores the obvious problems in those examples because it cannot accommodate for things outside its narrow scope.
If Central Park was steamrolled and prices dropped, then the model would be hailed as predictive of the price drop because the supply increased. It doesn't see the park and doesn't understand the reality.
It also ignores say, how the quality of public schools can affect housing prices, access to, speed and reliability of mass transit, recreational and cultural areas, cleanliness of the streets and the unhoused, perception of crime, availability of parking...
These important aspects all get ignored. Deciding policy without them is disastrous
The behavior of the market is complicated and new buildings with an increase in supply doesn't guarantee a price reduction. In practice, that should be sought through market regulation and policy - controlling of airbnb units, or units sitting idle as investments, or being withheld from the market ...
Those problems do not magically fix themselves and as you pointed out, self interested actors in a free market did not make 1,000 flowers bloom in Chattanooga or Cleveland. There's consequences for basing public policy strictly on neoclassical economics and pretending like nothing else matters.
Intentional holistic policy like they do in Amsterdam or Copenhagen is a good counterexample. Look at those places in the 1970s versus today.
We need more housing and lower prices but doing the first does not guarantee the second and the second can happen without the first. They're related but mostly independent problems that need separate attentions.