Just a few cities are at the heart of the housing supply problem, most notably New York City, Los Angeles, Boston, and San Francisco, which I refer to as Closed Access cities. There are two very different housing markets within the United States: the Closed Access market, where new housing is highly constrained, rents rise relentlessly, and households are forced to make difficult choices as housing expenses eat up their budgets; and the rest of the country, where homes can generally be built to meet demand, housing construction is healthy, and housing expenses remain at comfortable levels for the typical household.
Pointer from Tyler Cowen.
This is an important point, which I would like to see stressed over and over. We do not have just one housing market in the U.S.
For the nation as a whole, Erdmann makes two claims.
1. There was no significant widespread overbuilding during the housing boom. This claim is contrary to many people’s impression, but pay attention to his statistical support.
2. There has been under-building since 2007. This claim strikes me as undeniable. But I saw an essay on Medium recently that tried to deny it, using what I thought were inappropriate and misleading indicators.
I strongly recommend reading the entire paper, or at the very least skimming it to get all the main ideas. He is doing important work.