Elasticity of Supply: Why Housing is Unaffordable

[@MarginalRevolutionUniversity]

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[@Styrixa]

I really appreciate the non-partisan description of this phenomenon. It makes it much more helpful and shareable.

[@epoliv]

Protests against price increases are often pointed at developers: prices are going up because developers are greedy! That is so misguided. Prices go up because city government forbid construction. The anger needs to be towards that prohibition.

[@manuelcastellanosjr4929]

And the NIMBYs too, which is a form of opportunity hoarding (as some say).

[@mariusfacktor3597]

Exactly. What if we got upset that new laptops were so expensive, so we banned laptop manufacturers from producing new ones. After a while the 4 year old cheap laptops would become expensive too due to competition. That's essentially what has happened with housing. When you ban building new housing, there is more competition for older housing that used to be cheap.

[@chinguunerdenebadrakh7022]

Well, the voters wanted those laws implemented to preserve their property price and "neighborhood character". So the gov did ultimately implement the policies, but only at the behest of constituents. Everybody wants affordable housing till it has to be built in their backyard.

[@conradjanke7386]

This channel is my absolute favorite economics channel. The way you visualize the topics are great for understanding, and both Alex and Tyler are great teachers!

[@MarginalRevolutionUniversity]

🙏

[@ASDFCH]

I remember looking out the window of my $3,200/mo studio apartment in downtown San Jose and staring at two blocks of abandoned parking and barren land. It was flat with absolutely no economic activity. It drove me mad. I would think to myself, "that is the reason why my rent is so high". I've moved to TX since then where thankfully housing is more elastic. Thanks for the excellent video.

[@AnimatorGuy12]

I am so glad you guys are back! Amazing videos!

[@shabbar6499]

The best economics channel in the world. Thanks alot to you. Special thanks to two professor, i am extremely thankful to you both.

[@Scienceisananswer]

Love you guys! I make your videos and textbook mandatory in all my Macro and Micro classes for 10.5 years already!

[@prithviboinpally2138]

Glad to see videos being uploaded again! Great content

[@marcosfaria70]

Fine, supply inelasticity increases price. But what about demand inelasticity? In the hypothetical scenario, if 1 new house is being offered but none of those 10 potential buyers has money to pay more, the house will be sold by the same price as before - to one bvuyer who was lucky and got there before the others. So, for the whole argument to be consistent, you have to assume that demand is pefectly elastic. That at least a few people have more and more and more dollars to spend on housing and will pay whatever developers charge for that new house.

[@wakemewhenitsover3021]

Thanks for this great explanation and illustrations. In addition to reforms to make housing more elastic, I personally wish there were incentives for companies to spread out throughout the country so everyone and their brother are not trying to live in the same limited handfuls of insanely expensive cities.

[@yartsevovolley]

Thank you for such simple and understandable video😊

[@ke6944]

This is why remote work may also be a solution. If there is a demand for jobs that can be done remotely in these big cities, but the housing supply is limited, then remote work can alleviate that barrier.

[@Parcian-]

Thats why i am a Georgist

[@janningc]

This video feels too much like real estate developer propaganda. It doesn't cover: - supply of land vs. supply of housing - existing off-market supply (not new construction) vs. on-market supply - cases where upzoning doesn't lead to substantial increases in new construction

[@Andy-em8xt]

@@janningcIf you have a lot of people wanting to live in a highly desirable place, someone has to lose out, because there isn’t enough housing if you don’t build more. If land is the constraint, then the only place to build is up. Building more housing isn’t just about the new shiny construction. But the fact the overall housing supply went up. Yes rich people might move into them. But that frees up the old housing they would’ve bought to more people.

[@RankaNikunj]

Best and my favourite channel 👍. Love from India 🇮🇳

[@abuzarrizvi2294]

But why we see abandoned buildings and so many homeless people

[@TylerVinton-v5m]

any links on the 2016 NZ data?

[@MarginalRevolutionUniversity]

Hi, you can find all of our citations in the KZbin description or under the related resources tab on our website: mru.org/courses/principles-economics-microeconomics/elasticity-supply-why-housing-unaffordable

[@JGOlea]

Que buen video!!!!!

[@scottandcoke1342]

Supply and demand is a key component but far from the whole story. Treating housing as an investment vehicle is also a big part of the price rises.

[@YashArya01]

Still ties into demand, right?

[@Andy-em8xt]

Everything is an investment. The only reason it’s a good investment is because housing is hard to build more of. If I could make millions building more houses I would, the extremely high price is screaming for people to do so. But the regulatory cost is so high that it’s barely worth it.

[@neilirvine7129]

There's actually evidence that with unrestricted supply, housing prices tend to stay stable over time as a percentage of income. This is because there are limited uses for residential real estate other than for human occupation, and residential real estate tends to have a high carrying cost (ie high monthly cash outflows). Most people cannot have large negative cash outflows every month, so it only makes sense to hold properties like this if there is an artificial constraint on supply that pushes prices up.

[@networkgame]

It's said at 5:30

[@Michael-qj2eq]

Based and Henry George pilled

[@canellycathaliev2137]

nice video

[@macsnafu]

Take San Francisco, for example--PLEASE take San Francisco. I don't want it! ;-)

[@sofiamartins1255]

👏👏