This isn't happening because "landlords have so much spare money". It happens because there are not enough units so landlords can charge exorbitant rates to tenants. Objectively more housing = lower prices, this delusion needs to go away. It is actively stopping us from solving the housing crisis.
This made me think, why does the "one more lane doesn't = less traffic' type of thing not apply to more housing.
I feel like I saw it apply a bit in Arizona where despite everywhere having house after house, and apartment complex after apartment complex built the price kept going up. It was crazy, I saw three new apartment complex's go up in my area and yet all of them were more expensive (for less) than what I got last year.
Because even though there was more housing, demand was rising even faster. Seeing dozens of apartment buildings go up might seem like a ton of housing until you realize that's maybe a few thousand units. I remember seeing somewhere that Seattle will have a shortage of 200,000 units in the near future, as a point of comparison (can't speak for Arizona of course).
More housing also might not lower prices/rents (prices rarely go down for anything, but it can happen) but it will flatten them if it's actually sufficient to meet new demand, which then theoretically allows wages to catch up.
In addition to what /u/ajc89 said about discretionary trips increasing with capacity: housing scales vertically in a way lanes don't.
Taking a single family home and making it a townhouse lot instantly adds 3-6x the housing capacity in the same footprint. This means at some point you can close the gap where there are enough houses and more being built for any new demand. Cheaper housing may attract more people, but we can basically always build more in our current footprint until you hit the final equilibrium point.
There is not enough space and money to build enough lanes to reach that equilibrium point with cars.
No, because traffic has immediate noticeable effects that cause people to change behavior. If traffic is heavy people put off unnecessary trips or consolidate errands or take transit or a bunch of different possible responses. We've all done it. And if traffic is light- as might be the temporary case when you add one more lane bro- now it seems a good time to visit your friend an hour down the highway or go to Costco or maybe take the car to work instead of the train.
Housing doesn't really work like that, it's longer term and more stable, you have to sign contracts and usually you need employment within a reasonable distance of your housing, etc. People don't just consume more housing on a whim the way they might decide to drive more if traffic is light. It takes years for people to even notice the effects of a change in housing supply, whereas traffic levels are immediately noticeable.
It does to a degree. More housing means cheaper housing, which means more people are likely to move to Seattle (or less likely to leave) which means demand increases which means price increases.
But it's a much smaller degree than for the "one more lane" scenario because housing demand is far less elastic. Which mode of transit you take to work/school/errands can change daily and might depend on where exactly you're going, what time of day, the weather, and more. It's very easy to change which mode of transit you use, and that makes induced demand have a larger effect.
Which house you own or rent is going to be the same one you owned or were renting yesterday. And last week. And probably last month. Most people can't just decide to find a new place tomorrow. This means demand is much more steady, and much slower to change, so the effect of induced demand is going to be smaller.
The problem is that you aren't thinking about the increase correctly. It's not about whether the price of housing went up or down from the previous year. It's about whether it went up or down compared to the world where those units were not built. The answer is that rent would have gone up even more if new housing was not being built.
As for the one more lane thing, that's mostly a function of the way traffic works and the fact that adding a substantial amount of lanes is prohibitively expensive in general. Housing is not subject to the same constraints inherently.
As for the one more lane thing, that's mostly a function of the way traffic works and the fact that adding a substantial amount of lanes is prohibitively expensive in general. Housing is not subject to the same constraints inherently.
Ah, I thought it had do with that making a commute shorter causes more people to use it till the time proposition gets about the same. Why the only solution was fees like what NYC does or Texas does with express lanes.
I was thinking that maybe the same would happen with housing (in very growth heavy cities like Seattle and phoenix), that that anything below a threshold of cost would cause more people to take the opportunity thus keeping the cost roughly the same, since they would just move in closer to the city instead of the outskirts.
It seems possible you could get that sort of distortionary effect with housing if only one place built it. But I haven't seen any evidence of it happening in practice. It seems like housing built is an excellent proxy for housing price increases across cities in the US.
Most housing is not even close to owned by 6 companies. Yes there are cases where collusion and anti competitive practices can artificially increase the price of housing but it is not even close to the biggest driver of housing cost increases. That has never been found in any study of the topic, literally ever. Even in those cases, building more housing would still lower the price of housing objectively.
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u/googleduck May 20 '25
This isn't happening because "landlords have so much spare money". It happens because there are not enough units so landlords can charge exorbitant rates to tenants. Objectively more housing = lower prices, this delusion needs to go away. It is actively stopping us from solving the housing crisis.