Can Economic Fact-Checking Remedy Incorrect Beliefs About Housing Markets?

Supply skepticism is the widely held belief that building more market-rate housing does not help reduce housing prices. Why is supply skepticism a problem, and what is likely to be publicly engaged scholars’ best approach to correcting it? Been et al. have been the leading scholars bringing attention to the phenomenon, and have compiled new economic evidence that increasingly demonstrates that market-rate housing construction reduces housing prices. Will the skeptics who deny the operation of supply and demand in housing markets be persuaded? This seems unlikely. Engaged policy elites who question the benefit of additional housing supply already have well-formed views that are unlikely to be converted by recent, incremental discoveries about housing supply’s price effects. At first glance, the lay public also appears to be supply-skeptical, but their beliefs are only weakly held and unstable. Instead of clear beliefs about markets (skeptical or otherwise), people hold “folk-economic” views that personalize market interactions and blame “bad actors” for high housing prices. They support state housing policies that would punish putative bad actors (e.g., developers, landlords, and Wall Street investors) while showing only tepid and unstable support for building additional market-rate housing. The silver lining for pro-supply advocates is that the average voter’s poorly formed views about housing markets might be susceptible to education and persuasion campaigns that can effectively simplify current research findings.