…we examine how housing supply has evolved in four of the largest metropolitan areas (MSAs) in California and Texas. Despite the differences in their topographies and control areas, we find several common dynamics. As these MSAs grow, we see fewer new units being built in the suburbs and a smaller portion of the new units being built as single-family homes. Since the majority of new units are being built on vacant lots, more units are being built using high-density—and expensive—multifamily housing methods. Interestingly, we see these housing supply patterns in both “pro-growth” MSAs and “highly regulated” MSAs. Among all of our MSA samples, we also find a decrease in the share of Census tracts that participate in meeting growth. Our results are consistent with the existence of a convex housing supply curve. We believe that this national trend will present real challenges to many urban housing policies aimed at improving affordability.
That’s according to a recently published paper by Anthony W. Orlando and Christian L. Redfearn. By using the excellent Kevin Lewis.
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