As an Australian, this headline resonated. But this article is focused on the United States, where a trio of professors from the University of California looked at some of the shared delusions that are plaguing the discourse around the housing crisis.
The biggest delusion the professors found is that a majority of people surveyed did not believe there was a shortage of housing in the United States (something that the article explains has been proven time and time again).
But perhaps more surprisingly, the researchers found that 30-40% of respondents believe that if new homes were built near them, then rents and home prices would rise. This idea is known as “supply skepticism” and runs counter to basic principles of supply and demand.
In some ways, it makes sense. Thinking about new housing built near you likely makes you think of gentrification and newer, higher priced houses replacing older houses – pricing existing residents out. The UC professors explained that as, “the mass public tends to personalise and moralise economic phenomena”.
Housing markets around the world have different structural challenges. In Australia there is a policy and tax element to the housing affordability challenge, in America there is a challenge with the geographic distribution of work. But wherever you are in the world, we have something in common – building more would help, not hinder, housing affordability. The challenge is too many of us don’t quite believe it.
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