Increasing Housing Supply Can Never Meet Demand
This National Association of Home Builders study explains why increasing housing supply can never meet demand so long as the region has FULL EMPLOYMENT, as we have here on the peninsula.
Building an average single-family home generates 2.90 jobs.
“Probably the most obvious impacts of new construction are the jobs generated for construction workers. But, at the national level, the impact is broad-based, as jobs are generated in the industries that produce lumber, concrete, lighting fixtures, heating equipment, and other products that go into a home or remodeling project. Other jobs are generated in the process of transporting, storing and selling these products. Still others are generated for professionals such as architects, engineers, real estate agents, lawyers, and accountants who provide services to home builders, home buyers, and remodelers.”
Add to that the teachers, police, trash collectors, street pavers, physicians, gardeners, retail employees, delivery drivers and more that serve the new residents on a permanent basis – these are permanent long-term labor needs created by each additional home.
On the peninsula, where we have a labor shortage, this requires importing another 2.9 workers, and those 2.9 workers also need a home. So in building that one home you just dug yourself deeper into a housing shortage. This is basic supply/demand economics when you apply it to a full employment situation, and the math does not lie. But the supply v. demand equation has two variables; instead of increasing supply you can decrease demand; export jobs to regions that have excess workers and housing to relieve the local demand pressure. Don’t we all know young workers who would love it if their job moved them somewhere less congested and expensive!
Thanks to Kristen Mercer