@BenRossTransit @matthewstoller It’s precisely because they’re substitutes that their price is relevant as well. That is, to support high costs, it wouldn’t be enough to for, say, urban apartment supply to be constrained, if imperfect-but-decent substitute single family home supply were price elastic. And vice versa! If urban apartment supply were price elastic, sitting on suburban land would be much less profitable. 1/

@BenRossTransit @matthewstoller I’m not so interested in a pissing match over what the “main” barrier to price elastic supply is. I think the way to think about it is a wide variety of actors, from incumbent homeowners to the most prodigious suppliers of new homes, have a strong interest in preventing price elastic supply of homes, and all dutifully do their part. 2/

@BenRossTransit @matthewstoller I doubt national home builders “coordinate” tacitly or otherwise with “NIMBY” incumbents, urban or suburban. But each party doing the naive thing of resisting pr putting a high price on new supply is a Nash equilibrium — as long as everybody else is doing it, it’s the best thing to do for everyone (except buyers, of course). 3/

@BenRossTransit @matthewstoller It’s an easy equilibrium to find and sustain —each subsector acts like there are no substitutes to worry about, acts like they alone have pricing power, then collectively they do as long as no subsector defects and goes for quantity rather than margin. US housing has fallen into and put a moat around a lucratively sluggish groove. /fin