Quote:
Originally Posted by SebC
Sounds like it doesn't go far enough.
The "100% of the removed subsidy will be passed onto consumers" thing is complete bogus too, at least in the long run. That's only the case for perfectly elastic supply.
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In the long run, the housing market tends to be somewhat inelastic - and it doesn't actually have much to do with elasticity of supply beyond the (very)short term.
Demand elasticity will have a much greater impact on the passing of the cost. I would predict that the most relevant outcome of this subsidy diminution would be to incentive non-suburban development (i.e.: high density, central development/redevelopment).