Re:Denver rent is back to 2022 prices after 20k new units hi...
by JumpCrisscross on Thursday July 31, 2025 @05:51PM
(#44750595)
> only if you believe that more capacity does not induce more demand
No, it doesn't. What you're describing is elasticity. It's a well-studed concept, and means that a 5% increase in supply will probably reduce prices by less than 4.8%.
(An interesting side effect of a government committing to a zero real-price increase housing strategy is it eliminates whole categories of speculative demand. I wouldn't count on this for policy effects. But it's another feather in the cap for pro-housing policy.)
No, it doesn't. What you're describing is elasticity. It's a well-studed concept, and means that a 5% increase in supply will probably reduce prices by less than 4.8%.
(An interesting side effect of a government committing to a zero real-price increase housing strategy is it eliminates whole categories of speculative demand. I wouldn't count on this for policy effects. But it's another feather in the cap for pro-housing policy.)