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Originally Posted by something
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).
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It definitely will support non-suburban development, since suburban development will get more expensive. However, I bet more people will trade "down" to an ex-urban Airdrie/Okotoks/Cochrane than will trade "up" to an inner city development.