"Moving chains only work when I want it too"

In housing there is much ado about "moving chains". One side claims that moving chains are the key to affordability and the other side that they don't exist. Both are silly.

But today we'll deal not with how silly the argument is, but how some local advocates are quite hypocrtical about when it works. At root,

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.

Moving chains are advocates say extremely virtuous. Indeed, some (like the Grassroots Institute) think we should basically only produce luxury, high-end market housing because they are so virtuous.

They think that when someone moves to a new expensive unit, they leave a slightly cheaper unit, which someone else moves into. And of course that move to the "slightly" cheaper unit, kicks off another move, into an even slightly cheaper unit.

Eventually, if you add up enough "slightly cheaper" moves you get just regular cheaper.

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.

Adding new luxury homes to the market is good according to Grassroots because eventually a cheap unit gets freed up.

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."

But wait, that same statement applies equally to adding new luxury housing! The average O'ahu resident cannot afford a market rate unit in Kaka'ako; in fact more than 80% cannot!

That fact shouldn't, according to Grassroots, matter at all. Adding an new luxury home to the market should kick off a virtuous set of moves resulting in cheap housing being freed up!

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.

It cannot be true that when a Hawai'i resident moves into a new

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."