Comment by beeflet
6 days ago
Even if you can observe this induced demand locally in a city or two, the net supply is going up.
Globally, demand isn't even fixed. It's proportional to the population size, which we would expect to shrink.
The only way this could work in the opposite direction is that you build enough that it becomes feasible for everyone to live in a few supercities where demand keeps growing due to network effects, and the supply outside of the supercities is useless.
Housing stock definitely goes up in those cities that have the demand. Other cities drain out as a consequence and housing is razed in the cities that are no longer popular, like Buffalo and Detroit.
Do we really want that? Of course, housing has to be maintained and has a lifespan (the Japanese are good at rebuilding housing stock after 20-30 years), and so it can simply die off in the places that are no longer popular, but it seems like a waste of infrastructure investments that then have to be re-done in the new hot places.