The induced demand aspect is one I've found interesting for a long time.
The linked studies are interesting, but they seem to be looking at just short-term impacts, which I don't think would reveal anything of a potential "high demand -> new housing -> new commercial/business development to serve and take advantage of higher density -> even higher demand -> higher prices" cycle.
In developed countries, prices seem to be highest in the most developed, densest cities, which is why I suspect this loop exists.
(The counter-argument, which you could make based on SF, would probably be something like "a business cycle of growth like that can happen even without new residential construction, and then you just have even higher prices and more displacement as a result than if you'd built residential to match the business growth." But I wonder if this is ideal for the long-term health of the city or state/country at large, in cases of a bubble or compared to some of that business growth being spread out in more regions.)
Many usages of "induced demand" in this debate are really talking about increase in quantity demanded, i.e. more people will buy housing at a lower price.
The YIMBY response is "of course, that's the point" but for many left-NIMBYs the point was to reduce pressure on the budgets of existing households; accommodating these new buyers is not helpful (and might be harmful).
> Many usages of "induced demand" in this debate are really talking about increase in quantity demanded, i.e. more people will buy housing at a lower price.
Pretty much every market of interest for this debate is supply limited, so more people CAN'T buy housing if all that changes is price. It just becomes more of a lottery.
That's not what I nor the linked article are talking about - more an idea that continual growth may not necessarily ever lead to long-term downward price movement.
Living in SF made me realize just how close the west coast progressive rhetoric is to Trumpism. It's a strongly malthusian, always striking a tone of collective loss/victimization - helplessness in the defense of a birthright against some all invasive, malignant out-group based around a yearning for some rose tinted idea of the past.
Housing in a given neighborhood is actually malthusian. You can not produce land.
Also, defending the in-group is good, actually, when the in-group is 99% of people of lower income.
The problem with Trumpism is the defense of a xenophobic/racist ingroup and economic malthusianism in the production of commodities. There is no issue in and of itself in having a ingroup, especially one that is rabidly inclusive, and no issue recognizing that you cannot endlessly produce more housing on finite land area cities.
The whole argument is about getting more people onto the same land via taller buildings. "Endlessly" seems disingenuous in this context; we are nowhere near the technological limits on scaling cities. We are choosing not to pick up trivial wins.
Actually, no, we are really not that far away. When you start building taller, you do start having four important issues. First, you start having issues destroying existing housing and replacing it with taller buildings, which in the period in between leads to less supply, and then the rent on the taller buildings often is barely lower than it was before.
You also start having issues with traffic, obviously, and air quality, which can easily get so bad that no improvement is possible any more, especially when you cannot force people to use very high performance public transit
The third issue is that as you are already at taller structures, it gets more and more expensive to make things taller still - not only are the existing structures already incredibly expensive to build and thus really expensive to replace, but the structures you replace them with are also more and more expensive.
Which leads to the result that simply increasing density is not a solution to the problem but instead a temporary fix, as you rapidly brush up against the density limits of your economics and infrastructure, such that even the very densest places such as Hong Kong have hugely unaffordable housing. And as you arrive to your limit, the 6-7% rent increase clock keeps ticking and ticking, sometimes even faster than you can reduce it via increased supply while you're doing a massive building, let alone when you're not anymore.
So yes, there is simply no way to fix skyrocketing rent by simply scaling cities vertically. The truth is that in the end there is a hard limit to how cheap you can make housing in a free market. And you're just stuck there. The root cause is that you can't build more land. So the only solutions that work long-term require at least partial decomodification.
Each incremental person who can afford to live in a city is a good thing. For the person, for the city, for the environment, for the economy, for the world. Will you eventually run out of economically feasible buildings to build? Sure. But along the way, millions of people get what they want and couldn't have before. Swap drives across sprawl for subway commutes. Exchange "whatever's around" jobs for better ones that create more value. Get access to richer cultures and more potential friends.
Decommodification is not magic. Scarcity is still there. Unless you're going to expropriate from current owners, it mainly means the government buys housing on someone's behalf. The government suffers exactly the same problems as market-rate buyers there. Relieve scarcity, lower prices as much as you can, and tax revenue to those programs can do more good.
I agree with you whole-heartedly on the goal and the reasons why this goal is desirable. The thing is, the way this is done currently, which requires ever-increasing rent prices, serves to drive away people who have their entirely life based on one city, destroying social links and causing mental health problems.
The solution is the decommodification of land, very high speed modes of renewable transpiration, and spreading around in more than two or three cities, as well as a massive increase in supply as public housing.
That way, we can achieve our goals. We can have big cities, that allow for low carbon transportation, we can keep lower income communities alive, we can avoid incredibly high amounts of wealth being wasted in non-productive housing, and we can have vibrant cities, for anyone, not just for the fortunate.
Yes, you could build more, and have 30% more people in your city, but with rent so high that half of the city lives in economic precarity or has to move out, destroying their entire social circle and access to the aforementioned benefits.
In the end, it we abandon the obsession on free market solutions and partially decomodify land, we can provide the big city lifestyle to everyone that wants it with the economic, environmental and cultural benefits it brings, without merely postponing the elephant in the room of unsustainable rent prices.
And by the way, according to the authors arguments, even if we tripled density we'd just roll back rent increases for a mere decade at best.
The government has two main advantages here. Firstly, it doesn't need to pay unsustainable market rates if it implements rent control before starting big public housing housing investments. This is a synergistic policy, because while at the same driving down real estate prices with rent controls, you counterbalance the issues of rent control which are decreased supply with your own increased supply. The end result is that now you have much more housing, for cheaper.
The other huge advantage is that while real estate investors expect a 6-7% YoY profit rate, the government is fine with 0% or even less if the increased economic activity can pay for it back in taxes. The real estate market is ultimately unproductive, so going from 6-7% of exponential growth to 0% in value extracted without productive returns is a huge economic gain in and of itself.
You do of course need to keep the government accountable to keep this housing of proper quality, but competition with homeownership or private landlords can help here.
The thing is, this actually works. Rent control tweaked to reduce supply issues combined with public housing to finish providing the necessary supply works to reduce rent and keep it under control while also allowing newcomers to enjoy life there too.
Market solutions on the other hand don't work on the long term. Eventually, rent just continues increasing. Look at Hong Kong for an example. The density went way up as the zoning rules relaxed , but so did rent too. Compare it to even the very bad Chinese Hukou system, where rent in Shenzhen or Guangdong or Beijing is much, much lower. You don't get to own land because it is decommodified, but you get to rent private or public housing at very low prices, and if you have the Hukou you also get to own guarantees on the land. Even the worst such systems in high density cities provide better results than free market solutions.
I'm sorry, but this is incredibly disconnected from real life. In the real world, recent immigrants don't get to own property, much less own property to rent it out at increasing prices.
New buyers are absolutely not immigrants. Most immigrants are new renters, and cost sensitive ones at that.
Geography is important for those cities too. Nobody "builds up" in the US unless there's no place for the sprawl to go. Compare Atlanta and Houston to New York and San Francisco.
In the US, "spread out" == suburbanization which is a huge failure failure on so many levels. (Bad for environment, causes loneliness and isolation, and plain less ROI because proximity creates the dynamic economy).
Unless we have a fully "post-growth" economy, we need more Urban core.
Spread out here would really more refer to separate cities (with varying levels of urbanness) e.g. Austin, Denver, etc, since the densest cities don't really have room for more suburbanization. Is there a point where proximity a la SF turns into too much of a monoculture to still be as long-term beneficial?
(Those other cities, though, do have room to grow outward still, and so far keep going out; it will be interesting to see how long they can sustain that.)
The inner suburbs should stop subsidizing it by not widening freeways. Right now outward expansion is highly subsidized by everyone paying for those roads and not just the people living 1hr away from the city center that are commuting.
The linked studies are interesting, but they seem to be looking at just short-term impacts, which I don't think would reveal anything of a potential "high demand -> new housing -> new commercial/business development to serve and take advantage of higher density -> even higher demand -> higher prices" cycle.
In developed countries, prices seem to be highest in the most developed, densest cities, which is why I suspect this loop exists.
(The counter-argument, which you could make based on SF, would probably be something like "a business cycle of growth like that can happen even without new residential construction, and then you just have even higher prices and more displacement as a result than if you'd built residential to match the business growth." But I wonder if this is ideal for the long-term health of the city or state/country at large, in cases of a bubble or compared to some of that business growth being spread out in more regions.)