[dibujante]

Not necessarily. If you add density to an existing lot, your land increases in value, and since it’s likely the majority of the value of your property, your property probably goes up in value. Then, the increased supply decreases the cost of shelter.

[everforward]

How does it not reduce demand for land? Eg right now if I wanted to live in one of these places, I virtually have to compete to buy a plot of land that I alone own.

With high density housing, me and another few hundred people who would have been demand for land can instead buy condos or rent apartments and share that plot of land. Our demand was satisfied for fractions of a percent of the supply it would have taken with low density housing.

Ie high density housing efficiently uses land, thereby reducing demand for it.

Some areas will be gentrified and be worth more. If I were going to guess, the downtown core will spike in value and the suburbs will have to drop in value to compete with the affordability of downtown living.

I suspect a lot of people would live downtown instead of the suburbs if they could get a 2/3BR that wasn’t 4x the cost of living in the suburbs.

[jkolio]

That's a single plot, increasing density by maybe a factor of 6, at absolute best. If enough units come onto the market to relieve the so-called shortage, prices necessarily drop.

In any case, the problem might very well be, directly, that prices are too high, because it has invited speculation and warehousing. Inventory as the crux might be wrong.

[factorymoo]

> your property probably goes up in value.

> decreases the cost of shelter.

Which is it?

[abeppu]

They're claiming we can see both, because the number of people sheltered per unit of land will have increased.

While I see this as plausible in some cases, I also think it's sweeping a big error constant into "housing affordability" if we're saying that the kind of housing "affordable" to one generation is of a different kind than was realistic for the preceding generation. If your parents could afford a single family home with a yard and you can afford an apartment in a building put up where someone's single family home used to be ... surely we can agree that actual housing affordability meaningfully decreased?

[hammock]

Lot A has 1 single family unit. Land: 300K. Building: 600K. Total per unit 900K

You subdivide and build another house on the lot with building value 300K. Total land value appreciates 50K.

Outcome

Unit 1 land 175 + building 600, total 775 (and the owner gets 175 for the land they subdivided and sold off , coming out ahead 50k in cash)

Unit 2 land 175 + building 300, total 475.

Average unit cost on the lot is now (775 and 475) = 625 (30% decrease)