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The numbers don’t lie: The housing crisis is not caused by a supply shortage
(www.policyalternatives.ca)
The “supply-shortage argument” is encapsulated by the CMHC’s claim that “increasing housing supply is the key to restoring affordability.” If the argument is correct, then we should expect to see evidence that increases in dwellings per capita lower prices over time.
A great straw man argument 👍
It is difficult to find clear evidence that increased supply pushes price down, because in private markets, new supply only emerges when prices rise and developers feel reassured they can earn a profit on their investment. Price and supply both move up together over time, with increased supply not necessarily pushing prices down.
But when setting out to demonstrate supply’s downward impact on price, they instead use abstract models that presume what they are trying to explain.
Oh the irony. These economists with shady premises... btw you will never find evidence that supply pushes prices down, because in private markets that's impossible.
It's kind of funny that the same group that eats this kind of narrative like hot cake is also the group of people with a tendency to blame demand (as in immigration), like if by magic the supply vs demand relationship only works one way. Even though the last paragraph of the article tries to state this exact point (if supply is not the solution, demand is not the problem) - the only thing that this kind of article accomplishes is to undermine the efforts to build housing.