A new analysis finds that liberalizing zoning rules and building more won’t solve the urban affordability crisis, and could exacerbate it.

Build more.

That’s what a growing number of urbanists hail as the solution to the surging home prices and stark inequality of America’s superstar cities and tech hubs. They want to relax regulations that limit the supply of housing in already expensive cities, and start building taller and denser.

It’s supply and demand at work, they argue.Prices—in this case, housing prices—rise when supply is limited. Add more supply, and housing prices fall, making housing more affordable for more people, spurring more and better economic growth in the process.

A new paper by two leading economic geographers suggests this argument is simply too good to be true. Titled “Housing, Urban Growth and Inequalities” and forthcoming in the journal Urban Studies, it’s written by Andrés Rodríguez-Pose of the London School of Economics (LSE) and Michael Storper, who divides his time among the LSE, UCLA, and Sciences Po in Paris. According to Storper and Rodríguez-Pose, the notion that an insufficient supply of housing is a main cause of urban economic problems is based on a number of faulty premises. They say the effect of supply has been blown far out of proportion.

They agree that housing is part of the problem: “Housing market failures can imperil local economic growth and generate problems such as segregation, long commute times, deteriorating quality of life, homelessness, and barriers to social mobility for certain populations,” they write. But housing policy, and zoning restrictions in particular, are certainly not the be-all and end-all of urban problems. Upzoning expensive cities is no match for the deep divides within—and especially between—cities, and is wholly insufficient to remedy them… (more)