People do not believe that adding supply reduces housing prices
9 days ago
- #housing supply
- #policy
- #urban economics
- Housing supply in US cities and suburbs is severely restricted.
- Urban economists propose two main hypotheses: homeowner self-interest and political fragmentation.
- Homeowners lobby against development to protect property values.
- Political fragmentation leads localities to block housing due to negative externalities.
- A new explanation suggests people don't believe more housing reduces prices.
- Surveys show only a minority think a large housing supply shock would lower prices or rents.
- Beliefs about housing prices are weakly held and unstable.
- Respondents blame developers and landlords for high housing prices.
- Bipartisan supermajorities support price controls, demand subsidies, and restrictions on developers and landlords.
- These policies are seen as more effective than supply liberalization for affordability.