I don't even think it's "ought" vs "does" - it's more NIMBY interests being more ingrained into local politics allowing them to somehow gaslight everyone into thinking the laws of supply and demand don't apply to housing.

It's due to the unfortunate rhetorical coincidence that it's very easy to paint this belief as "trickle down economics" (even though it's absolutely not) and many, many voters will nonetheless be fooled.

Example: https://archives.sfexaminer.com/sanfrancisco/its-still-calle...

If you haven't registered to vote where you currently live, please do so now. In many states (including California) it takes just a couple minutes, you can do it entirely on the Internet, and you don't even need a local driver's license.

This then becomes politicised and people paint broad brushes of each argument, one side arguing "its not about supply! Its about x policy!" and the other side arguing "Its about supply and demand!".

Both sides are extremes, when the answer may well lie somewhere along the line in the middle. Specifically, in Australia the debate is about whether the best way to tackle affordability is Supply/Demand or whether it is reducing incentives for investors (tax breaks for house investors). There are solid arguments on both "sides", but its pretty clear that housing supply plays a part in both solutions.. the real question is to what degree it has a bigger impact than changing government policy in this case.

Point is the overall reason/cause doesn't mean it's the only consideration and thinking of it that way can lead to dismissal of valid joined issues/solutions.

One big thing they don't understand. You MUST increase the supply, absolutely MUST. There's no other way, except to reduce the number of jobs in the area. Every single regulation, every single affordability requirement reduces the total amount that can be built.

I've heard this: People make the argument: well every new market rate housing goes to rich people. What they dont get, is, for each so called rich person who moves into that new development, a new house comes onto the market (their old residence) and that helps push down prices.

It's unthinkable that so many people are going homeless needlessly. We need to increase the supply all the way to point where housing becomes affordable to everyone. And, yes, it will take a long time and a lot of building, but It'll be worth it.

The costs of buying land and building a mid-market building is not that much cheaper than building a luxury building. This causes the free market to favor new higher price units which leads to other development that pushes out the previous residents. Sure, that new supply will trickle down and lead to more affordability throughout the whole market, but it can still lead to higher prices in that specific neighborhood due to gentrification. It is therefore a balancing act between the health of the whole market and the health of individual sub-markets within it.

But, beyond the topical similarity, the cases fall apart. The situation with traffic involves only a small incremental cost being born by each driver, whilst in housing, the internalised costs are large. The drivers of housing inflation -- the interest of numerous parties in increasing asset values (free money for no work!) most especially -- are also highly different.

Actually, that last factor tends to make me suspect that the housing arguments are at least in a significant number of cases insincere.

Would you agree that a speculative boom can cause an increase in demand?

There never was. There are actual, valid debates around construction policy, however. Among them:

  1) should you prefer subsidized housing or market-rate?
  2) should you remove cheap, existing housing stock to make room for market-rate?
  3) does new construction lead to gentrification of affordable neighborhoods?