michael_nielsen

Many people in the Bay Area argue that NIMBYs ignore the basic economics of supply and demand. Build more housing, they argue, and prices will inevitably drop.

In the very near term, this seems right. Over the long run, I'm genuinely uncertain whether to believe this.

In Braess's paradox, increasing the capacity of a road to carry traffic may actually lead to more congestion, since more people will want to use it: https://en.wikipedia.org/wiki/Braess%27s_paradox …

What bothers me is that generally speaking the biggest cities (a) have the largest supply of housing; and (b) have the highest prices, because being big makes them so attractive. So a large supply is actually anti-correlated with low prices.

So while I believe the supply-and-demand argument over, say, a 1-year timescale, I wonder if it's false over 20 years. Make housing a lot easier to build, SF will become a much bigger city, and prices may go up even more.

Rents in Tokyo would disagree. Also, there’s non-monetary benefits to growing the city (as you mention: they’re more desirable to live in)