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For cities like NYC and SF I think it’s clear there is a ton of induced demand.

If housing prices were cut in half in SF you’d see WAY more people moving here.



Comments above are correct, I'd also add that NYC and SF are "inducing demand" not by building housing, but by building office space at a rate 8x-12x that they are building residential dwelling units. Over the past ~10 years, for every home the SF bay has added it has added office space for 8 jobs. Adding housing doesn't create more demand for housiing, adding more offices creates more demand for housinig.


That's not induced demand, that's a standard demand curve. The price drops and more people buy it.

Induced demand is "adding supply increased the price"


The best example of induced demand ignores price.

Build more freeways and you get more drivers.


> The best example of induced demand ignores price.

> Build more freeways and you get more drivers.

That's like having a McDonalds without enough cashiers and then saying "hire more cashiers and you sell more hamburgers" is induced demand because the hamburgers cost the same but you sell more of them.

That's not induced demand, you're just changing the price. Having to wait in line (or sit in traffic) is a cost. If you reduce the cost, demand goes up, but that's just ordinary supply and demand again.




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