The anti-market delusion at the heart of the housing crisis

Milan Singh writes an article in The Argument about housing that once again confirms the YIMBY priors of all neolibs.

But there's a distressing point amidst all the validation:

"The point of these papers is that housing is, in fact, a market that obeys the normal laws of supply and demand.

Unfortunately, voters simply do not believe this.

In “The Folk Economics of Housing,” Christopher S. Elmendorf, Clayton Nall, and Stan Oklobdzija conducted three national surveys and found that “ordinary people simply do not believe that adding more housing to the regional stock would reduce housing prices.”

It’s not that voters don’t understand supply and demand in general. In their surveys, the researchers found that most voters correctly understand how supply chain issues in car production would affect the prices of used cars, how free trade agreements affect consumer prices, how better fertilizers would affect grain prices, and how increasing the supply of plumbers would affect the wages of plumbers who are already in the market.

But when it comes to housing specifically, voters simply don’t believe an increase in housing supply will lower prices — in fact, they believe the opposite.

You see the same thing in this poll from the Searchlight Institute, which was conducted in July 2025 and released in September 2025. When asked about the effect of increasing the number of homes in their community, 44% thought it would raise prices, compared with just 24% who thought it would lower prices and 32% who weren’t sure either way.

In both the Elmendorf et al. research and the Searchlight polling, voters were most likely to blame landlords and private developers for high housing prices — not zoning regulations.

When voters think about new housing in their neighborhood, “they think that groceries will get more expensive, they think that crime will go up,” Charlotte Swasey, the director of analytics at Searchlight, told me.

“I think people also see that new housing gets built and maybe they look up the rents of the new housing, and it’s expensive, and they’re like, ‘prices are going up because this new thing is very expensive,’” Swasey said. Voters aren’t considering that the price of mediocre-quality apartments goes down due to new construction or that new construction and rising rents are both downstream of increased demand to live in a particular area."