Agglomeration effects are real. And you are better off building space for people in highly productive cities like NYC and San Francisco, then to force them to toil in obscurity in Appalachia.

They wouldn't be paying exorbitant amounts of money to stay in NYC or SF. They haven't in the past, before America stopped building. The distribution of rents used to be fairly 'flat', without the crazy spikes in productive cities we see today. See eg https://kevinerdmann.substack.com/p/the-consumption-basket-w...

Yes, many people have a preference for single family homes. If the people who are ok with density were legally allowed to enjoy that density, then there would be more space (even relatively close to city centres), left over for the people who prefer single family homes on large plots.

That also applies for your concerns about rich people taking up land: legalise density and building taller.

> The retrofits are major capital expenses that my mention later on. They get more expensive the bigger the house is. You still have larger costs on things like a new roof or flooring since there's simply more of it. Yes, they themselves generally wouldn't become a limiting cost. But neither would the property cost nothing.

Maybe, but you'd expect homes meant for rich people to have nicer than average roofs and flooring already. So your concern is a bit weird.

The vacancy rate doesn't seem particularly outside of historic norms: https://tradingeconomics.com/united-states/rental-vacancy-ra... So I'm not quite sure what you are on about?

In any case, even with your much higher estimate of 10% it's not a big deal. Even if you magically went from 10% to 0% vacancies overnight, you'd still only increased the effective housing supply by about 11%. The shortfall in building is much larger than that.

Again, please have a look at https://kevinerdmann.substack.com/p/the-housing-shortage-is-... and perhaps https://kevinerdmann.substack.com/p/random-notes or https://www.amazon.com/Shut-Out-Shortage-Recession-Universit... for a book length treatment.

According to this Vox interview with Jenny Schuetz (https://www.vox.com/2019/5/17/18628267/jenny-schuetz-weeds-i...), there are two housing crises: the superstar city crisis of million dollar homes due to exclusionary zoning, and rising rents for low-income households in the rest of the country. According to Kevin Erdmann, the crisis in the rest of the country was caused by federal policies that restricted lending to low-income households, forcing them to rent for more than they would have paid in mortgage (https://www.mercatus.org/tags/housing-affordability-series https://www.amazon.com/Shut-Out-Shortage-Recession-Universit...).

When Kevin Drum looks at national medians, he entirely misses both of these problems.

The author Alex Danco’s link that supposedly proves that building housing doesn’t improve affordability is a poor review article by Michael Storper and Andres Rodríguez-Pose that is rather thoroughly debunked by their own colleagues Michael Manville, Michael Lens, and Paavo Monkkonen here: https://twitter.com/mc_lens/status/1129502980498022401 In summary, Storper badly misrepresents or misunderstands the economic literature, and attacks strawman arguments, to try to avoid admitting that supply improves affordability.

The author also says, “The third factor that somehow gets left out of a lot of armchair debates about housing and yet is an essential (possibly THE essential) element in all of this is credit.” As Kevin Erdmann explains in Shut Out (https://www.amazon.com/Shut-Out-Shortage-Recession-Universit...), the opposite is true. Credit is the factor that people jump to to the exclusion of rent (and expected rent given the low rate of homebuilding), which is directly related to supply constraints. Housing prices are high in the Bay Area because rents are high; low interest rates did not detach prices from rents.

Yes, there are a lot of factors in the housing market if you want to get deep in the weeds. But in my opinion, attempts to elevate second and third order factors to avoid dealing with the first-order factors of supply and demand are sophomoric.