In contrast, a trailer in the middle of several acres may bring adjoining property values down. High quality density generally raises housing prices, but it also rewards property improvements and lowers transportation and infrastructure costs. The last myth is that keeping new housing affordable is good for homeowners. New homes and existing homes are substitutes. Where new home prices reflect full costs, more people will decide to renovate existing homes.
Higher returns give incentives to homeowners to maintain, rather than abandon, older neighborhoods.
In the end, the bill must be paid by consumers and taxpayers. It may not be all that affordable. Daphne Greenwood is Professor of Economics and Director of the Center for Colorado Policy Studies at CU-Colorado Springs.