Reply to Overriding local zoning to allow multi-family units in suburban neighborhoods in VA

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Copying this question from another thread (it refers specifically to DC but you can swap in Arlington, for example, if you prefer):

Is there a coherent argument that loosening zoning laws will lead to affordable housing in DC?

I hear this constantly asserted, as if it were self-evidently true, but cannot figure out how it could possibly be correct.

There's 700,000 people in the District. There's 5 million in the suburbs. If you add 30,000 housing units in DC, they will instantly be soaked up by people in the suburbs looking for shorter commutes.

As people move into DC from Falls Church and Rockville and Fairfax, their old places will open up for other people. Other people will move into those places from suburbs even further out, which will open up slots in places like Chantilly or Columbia or wherever else those people are coming from and that would put downward pressure on housing prices in the suburbs they've left.

But how does any of that lead to affordable housing in DC?[/quote]

Everyone hates the Federal Reserve analysis and yet no one can answer this simple question. [/quote]

A luxury one bed room market rate apt rents for, say 2,000 in Arlington.   You build ten more, holding the employment in the region, transportation access, etc constant.

How much if any do you have to reduce the rents to fill those ten units?   Anyone willing to move there at 2,000 has already moved in.

But can you fill them by lowering to $1999.99 ?  Do you need to lower to $1999.00?  To $1900?

The answer depends on what economists call "the elasticitiy of demand".

In this context, are there are a lot of people living in Alexandria, in Leesburg, in Falls Church, in Kalamazoo,  who would move to Arlington for a penny drop in rent from what it had been before?  How many for a dollar drop?

Since its only ten units, probably you can fill them with a really small drop in rent.

But with a larger increase, it will take a bigger drop.

If we increase the number of units in DC AND in Arlington, it will take an even bigger drop.

At some point you run out of people who live in the region, work in DC or Arlington, and who would be willing to give up their exurban SFH lifestyle for anything but a huge drop from existing rents.

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