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It may take years to finish a construction project form scratch. With a growing population, supply could never meet immediate demand. Moreover, new houses are more expensive due to high production costs. Therefore, low-income family would not be able to afford them. In other words, new housing could not fulfill the demand of low-income people...
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Therefore, low-income family would not be able to afford them. In other words, new housing could not fulfill the demand of low-income people. In the short run, new construction cannot directly increase the supply of housing at the lower end of the market. This is also the reason that the housing market supply is inelastic...
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