Comment by AnthonyMouse

> Induced demand can only function if there's a scarcity to begin with, and it's premised on increased supply increasing affordability (that's the mechanism by which it works)

I don't think that's how the theory is supposed to work. It's more along the lines of, if you build more housing in a place then more people live there and then the higher population density can sustain more shops and jobs, and then people want to live near shops and jobs so the local demand increases.

There are two reasons the theory doesn't actually mean that you can't solve the problem with more housing.

The first is, the effect isn't infinite. As the reductio, if the entire New York Metro area had the population density of Manhattan, it would house 450M people, which is more than the entire US population. So you can build more housing than you have people to move into it even if that would literally cause the entire national population to move to the same place, and of course building that much housing in one place wouldn't cause literally everyone to move there anyway, so the amount you need in practice is far less than that.

And the second is, it's a local effect that comes from net migration. If you build more housing in Denver and that causes people to want to move from Austin to Denver, even if you don't build enough to overcome that in Denver itself, you'd still be lowering housing costs in Austin. And if you're simultaneously building new housing everywhere then there is no net migration and therefore no induced demand anywhere.