That is partly true, but planning and zoning restrictions prevent building up as well.
If you think about it, increasing the amount of dwellings on a plot of land has a cost, that can be amortized over a number of years. If the market was free, the price / rent for a high rise dwelling would tend towards this cost.
However, if you want to erect an apartment block, you have to apply for planning. Local objections generally prevent it from being built (hence the references to NIMBYs).
So it isn't a free market, because supply is controlled by the city government.
There is some acceptance that planning laws don't work - it is implicit in the overriding laws that kick in for major infrastructure projects like freeway builds (called compulsory purchase here).
You could say maybe this needs to be extended to apartment building. But I think it shows the planning system's criteria are broken. Rather than balance cost and benefit, it only takes into account the reasons not to build.
You're correct, but I was responding to the claim that land was somehow a special commodity -- in the words of my parent, "land isn't entirely a 'market' good - barring some pretty major civil engineering, increased demand for land in SF isn't going to make more land come on the market".
I reject that claim entirely, and your comment doesn't address my reasons. The supply of cocaine is controlled too, but I suspect that it's a fairly clear example of a 'market' good in the sense of my parent comment. Residential area is not limited any more than cocaine is.
Comments
That is partly true, but planning and zoning restrictions prevent building up as well.
If you think about it, increasing the amount of dwellings on a plot of land has a cost, that can be amortized over a number of years. If the market was free, the price / rent for a high rise dwelling would tend towards this cost.
However, if you want to erect an apartment block, you have to apply for planning. Local objections generally prevent it from being built (hence the references to NIMBYs).
So it isn't a free market, because supply is controlled by the city government.
There is some acceptance that planning laws don't work - it is implicit in the overriding laws that kick in for major infrastructure projects like freeway builds (called compulsory purchase here).
You could say maybe this needs to be extended to apartment building. But I think it shows the planning system's criteria are broken. Rather than balance cost and benefit, it only takes into account the reasons not to build.
You're correct, but I was responding to the claim that land was somehow a special commodity -- in the words of my parent, "land isn't entirely a 'market' good - barring some pretty major civil engineering, increased demand for land in SF isn't going to make more land come on the market".
I reject that claim entirely, and your comment doesn't address my reasons. The supply of cocaine is controlled too, but I suspect that it's a fairly clear example of a 'market' good in the sense of my parent comment. Residential area is not limited any more than cocaine is.