Reply to Increasing density drives low-income minorities out of DC, new study shows

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]So move to loudon county if you don’t want density.[b] The fact is, housing is unaffordable because there isn’t enough of it.[/b] [/quote]

This is just wrong.

Increasing density drives housing prices up, not down.

If you have a bunch of people living in a small area, then businesses will want to be there too because they want foot traffic. As bars and grocery stores and restaurants and boutiques move in, then more people want to live there too. So more condos and apartments are built. That brings even more bars and grocery stores and restaurants to the area, which makes even more people want to live there, and housing prices go to the moon.

This has happened over and over and over in neighborhoods across DC. Look at Navy Yard (before that 14th Street, and before that U Street, and before that...)[/quote]

A well-known phenomenon in economics - the price increases when the supply increases.

Wait, what?[/quote]

Uh, well, I didnt make this up. Economists have talked about this for years. There's academic papers written about it. [/quote]

PP here. I'm an economist. It's very possible to write models that can generate this behavior, but:
 - There is no empirical concensus that this actually happens in the real world, nor any consensus on exactly which theoretical model is the "right" one.
 - Every one of these models still has a downward sloping demand curve, so that increased quantity of identical housing conditions leads to lower prices.  What you're describing is an amenity externality, in which the increase in density affects people's utility of consumption and therefore their willingness to pay.
 - That is to say, you're completely ignoring the fact that all those amenities make people better off, which is why they are willing to pay for them.  The housing is more expensive because it is better in the eyes of sufficiently many people, and they are made better off by its existence.  That is not to say that there can't be "losers" who are made worse off in models such as the one you're describing, there can.  For example, displaced poor people can be made worse off if they can't afford to stay.  But in order to go further than that and say that increasing density is socially bad, you would have to make utilitarian assumptions that go beyond what any economist I know would comfortably make.[/quote]

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