Or did you know the National Bureau of Economic Research just published a study concluding “Supply Constraints Do Not Explain House Price and Quantity Growth Across U.S. Cities”?[1] Directly contradicting the YIMBY narrative that all we need to do is unleash market rate supply.
Simple economics tells us that when you have a boom town with strong demand from white collar professionals migrating in, driving up incomes, they will outbid lower income folks for market rate units ten out of ten times. Per the law of supply and demand, all of that demand needs to be satisfied before market prices even have a chance of declining to affordable levels - and that’s only if the real estate industry decides it is profitable to keep building. Older units get renovated into luxury units as well.
That creates a real scalability problem for cities because you get a labor shortage. That drives up the cost of everything: education, restaurants, and you guessed it, construction itself.
That’s why social housing is such an international standard. Without affordable working class housing, the local economy becomes dysfunctional. And it echoes the debate we had about socialized medicine some years ago, the solution favored by pretty much all other developed countries, but always said to be too expensive or impractical to be done here, the richest country on the planet.
But we’re beginning to see some cracks in the narrative. And it clarifies why these right wing movements find the Abundance agenda so appealing.
