In housing there is much ado about "moving chains". One side screeching that "it works" and the other fumbling around trying to say it doesn't and mostly using red herrings.

If you are fortunate enough to not know, "moving chains" is the way economists describe the sequence of moves that happens when a new unit enters the market.

It is advocates say extremely virtuous. It is an argument primarily for why we should want lots of luxury or top-end market homes to be built in Hawai'i. Indeed, some (like Hawai'i Appleseed and Grassroots Institute) think we should basically only produce luxury unit housing because the cycle is so virtuous.

UH Hero helpfully provides the following real world example, which presumably was the best they could do.

So in a nutshell, the argument is that adding an expensive unit is good because in the end a cheaper one is vacated.

Ok so got that? Grassroots Hawaii and HI Appleseed and all these other housing orgs believe that adding an expensive unit, one unaffordable to 90% of Hawai'i residents, means that we set off a chain reaction resulting in cheaper housing.

Except that is, for when they don't. See, if we were to impose an empty homes tax, that would do no good according to Grassroots because "the homes [are] owned by wealthy mainland individuals [and] are not the homes that average Oahu residents can afford anyway."

There is no difference in how that high end home enters the market though. It doesn't matter if the $1.4M home for sale is a new one that until just now had been vacant or an old one that until just now was vacant. The effect ought to be the exact same. In both cases, a moving chain should start.

So why do local housing advocate think that moving chains only work sometimes? Well lets just close with this Upton Sinclair quote: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."