Supply and Demand: Debating the Blame for Gentrification
Jim Russell writes the most recent installment in the debate, clarifying points he originally made about recent academic research "that adds to the literature about the real estate market problems caused by limited (by whatever means) supply." The original report is called Superstar Cities, authored by Joseph Gyourko, Christopher Mayer, and Todd Sinai.
Russell's clarifying point: "What defines the geographic variance in [the research] case is the quality of demand, not the restriction of supply. Lots of places have some sort of constraint on housing. Few of those places qualify as 'superstar'….Within a metro, quality of supply matters, too."
Russell's most recent post responded to a post by Daniel Kay Hertz saying that Russell originally turned the conclusion of the study on its head. From Hertz's analysis of the white paper: "The housing crisis that’s led to wildly growing income segregation everywhere from Chicago to Kansas City is, actually, about 'demand outstripping supply.' And this paper is just the last in a long line of research supporting that conclusion."