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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]

I know this is like a religious belief for some, and that no amount of evidence can change your mind, but economics is more complicated than you think. [b]There's an entire paper, put out by Federal Reserve economists, debunking this whole idea that increasing supply is going to cut prices.[/b] But I'm sure you know better than they do. What do some of the brightest economists in the world know anyway, right? [/quote]

link please[/quote

https://www.federalreserve.gov/econres/feds/files/2018035pap.pdf

"Our results suggest that the rent elasticity is likely to be low, and thus marginal reductions in supply constraints alone are unlikely to meaningfully reduce rental burdens."[/quote]

Oh good grief.

[i]We estimate a neighborhood choice model using 2014 American Community
Survey data to investigate the degree to which new housing supply can improve
housing affordability. In the model, equilibrium rental rates are determined so
that the number of households choosing each neighborhood is equal to the
number of housing units in each neighborhood. We use the estimated model
to simulate how rental rates would respond to an exogenous increase in the
number of housing units in a neighborhood. We find that the rent elasticity
is low, and thus marginal reductions in supply constraints alone are unlikely
to meaningfully reduce rent burdens. The reason for this result appears to be
that rental rates are more closely determined by the level of amenities in a
neighborhood—as in a Rosen-Roback spatial equilibrium framework—than by
the supply of housing.[/i]

[i]In this paper, we present simulation-based evidence that the elasticity of rent
with respect to small changes in housing supply within metropolitan areas (henceforth, “cities”) is low. The implication of this finding is that even if a city were able
to ease some supply constraints to achieve a marginal increase in its housing stock,
the city will not experience a meaningful reduction in rental burdens.3[/i]

This doesn't say what you said it said. It just says that small increases in housing supply don't meaningfully decrease rents (i.e., rent isn't very elastic) - which is a model result that shouldn't surprise anybody who lives in the real world. It does not say that increasing housing supply won't reduce the cost of housing.[/quote]

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