The Unassuming Economist

From Market Urbanism:

“Two teams of researchers recently released estimates of the U.S. housing shortage – and they differ by a factor of five. Is the national shortage 20 million homes or just 4 million? With a range that big, both published by pro-housing groups, you’d be forgiven for thinking this is an exercise in futility.

But look under the hood and each estimate is asking and answering a different question. Together they offer a useful parallax on the current cost crisis. To oversimplify, here’s how I’m thinking about the studies:

• America needs to find space for about 4 million more households.
• City housing deficits add up to about 20 million dwellings, but the total is less than the sum of the parts.
• If we deregulated everywhere, high-priced places would build much more housing than Up For Growth predicts. And moderate-priced places would build much less housing than the JEC predicts.

JEC: 20 million

The easier report to understand is that produced at the Joint Economic Committee by the classically-named duo Kevin Corinth and Hugo Dante, the latter a GMU/Mercatus alumnus. They use a straightforward supply and demand framework with some simple, defensible assumptions about the housing production function and the demand curve within each county.”

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