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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Loosening zoning laws is going to make zero difference to housing prices. It's odd how people have convinced themselves this is some kind of silver bullet to high housing prices. [/quote]

Supply and demand doesn't apply to the housing market?[/quote]

Yes, it does, and that's the problem for those selling zoning as the easy answer to everything.

They always want to focus on the supply side of the equation, and assume that if they just bring more housing units onto the market, prices will decline. [b]But what about demand? If prices were to actually go down, demand would go up because that's what happens when prices fall. [/b]

Housing prices will never actually fall no matter how many units they build because it will always been exceeded by demand. There's millions of people who would happily move into the District (do you think people want two hour commutes?) and there isn't space to build millions of new housing units. 
[/quote]

See the problem really is that people either never took, or never understood, Econ 101.

The above commenter does not know the difference between "demand" and "quantity" demanded.  Or what elasticity of demand means.

When supply of X goes up, and prices go down, and then people buy more of X, that is NOT demand going up. The demand curve (which tells you how much people will demand at any given price) has not moved.   The quantity demand has moved - we speak of that as "moving along the demand curve"

Now its possible that the demand curve is perfectly elastic, which means that any increase in supply will be "soaked up" and no change in prices will occur. But that is in fact very rare, and almost certainly not the case for housing across a metro area (it may be the case for housing in one neighborhood, where a drop in prices will lead people to move from other neighborhoods).

IRL terms a perfectly elastic demand curve for housing means that say, the rent for a 1BR apt is $2500.   You build 10,000 more 1BR apts.  The rent will NOT go down even to 2499, because as soon as it does, there are 10,000 people interested in renting 1BR at $2499, who were not interested in paying $2500.

The same thing at 20,000 units. Or 30,000 units.

Some reflections shows this is absurd.

Now, it is also true that demand shifts for other reasons. In particular in a region like ours demand for housing increases because there are more jobs in the region.  But IF there are more jobs in the region, that demand shift happens whatever you do to supply of housing. And results in higher prices.  
[/quote]

If anything, increasing density will make housing more expensive. Look at Navy Yard. Way more people live there now. It's also way more expensive than it used to be. Happens over and over and over in neighborhoods across DC. [/quote]

Navy Yard had hardly any market rate housing at 15 years ago. It was parking lots, gay nightclubs, and empty lots.  Cut off from the City by I395 and only recently having gotten a metro station.  If Navy Yard had been built up at a 20% lower density it would have become just as expensive. If it had been developed as all market rate townhomes it would likely have ended up as expensive per square foot.

But building all that housing in Navy Yd almost certainly lowered prices and rents elsewhere, by drawing off demand.

[/quote]

You know people actually did live in Navy Yard before all the developers moved in. They weren't rich or white (sorry!) but there were there, and the city pushed them out so it could build lots high-end condo buildings. Yay density! [/quote]

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