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As a single data point, I live in one of the most dense european cities and home prices are insane. Probably a mix of speculation, tourism and other policies.

While density might play a part it's not a silver bullet. As with everything, the solution is probably custom to each city and region

2 comments

Perhaps it's not dense enough compared to how economically valuable living there is. Otherwise, why would people live in an overpriced city instead of a cheaper one? Why do you live there? Surely for most residents, it's because of high-paying jobs.

Most people live here because they are from here, local jobs are definitely not high paying.

Could they move to a cheaper city? Probably, but that has big life implications, people might take the economical hit to be able to stay close to home.

What I mean to say is that in this particular case it's not just a density problem. There's problems with tourism, there's problems with speculation, there's problems with general inequality. So the solution is not just build more, it's way more nuanced.

Is that density caused by confining the city to a small footprint? If not, how do the suburbs look? Are there density restrictions on the suburbs?

And on a non-financial view, how is the situation w.r.t. public transport and car usage?

I fully agree that density is not a silver bullet. My point is that artificially reducing density when there is a high demand for living places is bad. Both because of supply and demand, and also because of positive externalities from (voluntary) high density living.

It does seem to sometimes be the case that high density cities increase demand so much that prices remain the same, or increase. That sucks from the perspective of economic equality. However, from a perspective of creating value, this is amazing. It means that these dense cities give the same value (enjoyment of living there) to more people. Especially if (as you say lower in the thread) people aren't moving to the city for jobs, but for the city itself. That essentially shows that the city is just really nice to live in.

Sadly, it suggests that density sometimes does not help economic equality. But it is still a massive improvement to have people want to live in the city so much!