Supply & demand are not some type of fundamental laws of the universe. They are always changing and based on greed.

If I produce 100 widgets and am perfectly happy selling them for $10 and barely think I'll sell 10 of them.. but then they are highly popular and everyone wants them, you might see me constantly increasing the price because people like them and want to buy them. But that is literally greed in action. I did the math that I would make a nice profit at $10. But now that rich people decide they will pay $50 for each one just because they have the money and don't care, the people that could only afford $10 are priced out. And now the price has been increased and only people with a lot of disposable income can afford it.

Yeah, look at that "supply & demand" in action. Greed and and an excuse of "but wut could I do, the curves I plotted forced me to increase my prices even though I could have left them alone!"

The above is exactly a ticketmaster type example. We let "the market" set the price because people are willing to pay more and more, but those are the small percentage with a lot of disposable income that then get to have all the fun while people sit back and say "no one has a right to go to the concert [except those that can afford to keep on paying more and more]".

Economics is literally based on the assumption and ACCEPTANCE that everyone is a greedy asshole like yourself.

You’re assuming there’s just one type of ‘widget.’

If you’ve cornered the market in ‘luxury’ widgets, someone else will make a ‘bargain’ widget and sell to those with less money.

Hotels are a good example. The luxury brands are competing for the wealthy. But, you don’t have to be a Ritz-Carlton to make money… indeed, you can often make more by selling rooms to the less wealthy (as there are more of them.) And, on it goes, all the way down to the Motel 6’s and the mom-and-pop motels.

The laws of supply and demand only says that an increase in supply will decrease price if everything else remains the same. Since that isn't the reality in housing markets there is nothing in the laws of supply and demand saying prices can't increase more by building more than they otherwise would have.

So, you are saying that increasing the supply of housing in this case actually would cause an increase in prices? How would that work?

I agree that there is no guarantee that building housing lowers prices, other causes (like increases in demand) may cause prices to go up (and the increased supply would lower the upward pressure). But I have a hard time to understand how increased supply would not have a downward effect on prices.

> But I have a hard time to understand how increased supply would not have a downward effect on prices.

It does, if that is the only thing that happens. If land owners or existing home owners willingness to sell, prospective renters or buyers willingness to buy, or any number of different things also change then those effects can overshadow an increase in supply. As they frequently do.

Starbucks keeps opening new locations but that doesn't say much to the effect that the price of a cup of coffee will decrease.

> But I have a hard time to understand how increased supply would not have a downward effect on prices.

We can build housing much more efficiently and cheaply than we could 60 years ago, yet it's never been harder to buy a house.

The law of supply and demand only works as expected when used in an extremely simplified model.

If you account for all the other real factors (corporate greed, governmental intervention, NIMBYsm) that are skimmed over by economists, it becomes clear that the law of supply and demand should never be used alone to forecast future economic conditions.

I don't think that you can build much cheaper than before, is like the cars, they have more or less the same price but have improved in many ways (efficiency for example). Anyway, the building cost is many times not the most important thing in the price of a house.

> they have more or less the same price but have improved in many ways (efficiency for example).

If that was true, buying a house today would be as easy as it was in the 60s. In fact it isn't.

Supply and demand still works, but only when we account for the artificially limited supply of buildable land and permits.

Would it be possible to crowdfund housing projects? I have seen some examples in europe where you buy into a housing with your savings. Development is complete done through collective desires of the fund.

Not to be glib, but isn't that the role of government? Society crowd-funds projects with taxes. I appreciate that a smaller group could have finer control over decisions, but that might be a hard sell.

Nah, that is too much more work than blaming Capitalism lmao.

That basically says more supply can't CAUSE price increases.

Usable land is finite.

Right, but thankfully most people aren't interested in raw land area and more interested in livable space. If you bulldozed a few dozen houses and built an apartment building on top, you still increased the amount of people that could be housed there.

I'm on the 21st floor. This floorspace didn't come with the land.

We're not talking about iphones here, people need housing to survive.

The housing price could keep rising forever but the demand will always be high, it's not like people can just "give up on housing for this year".

Being a mega-landlord will also allow JPMorgan to influence the general market price.

So no, it's not really as easy as "the laws of supply and demand".

Edit: lol, never ever touch the dogmas of neoclassical economics on HN. Running into a church during mess and shouting profanity would get you a better reception.