Good for whom? If it's good for the residents, that's great. If it's bad for the residents, who get driven out, but good for some developers and outside rich people - that's what gentrification is.
Even renters in gentrifying areas may profit if housing construction outpaces population growth. Yes, they may have to move, but also the places they move to on their current budget may be nicer - because the people who can afford better have moved too.
That also raises property taxes, making the neighborhood unaffordable and driving them out.
> it's now a more pleasant area to live in.
For new wealthy residents. People who have spent lifetimes there don't want everything to change and have their communities destroyed.
> Yes, they may have to move, but also the places they move to on their current budget may be nicer - because the people who can afford better have moved too.
These are theoretical and very general averages. The actual individuals often do not benefit. Being forced to move is not a mere inconvenience to your theory.
That isn't theoretical. I just described the SF Bay Area.
Literally impossible unless:
1. People are living in multiple houses
2. New construction hasn't kept up with population growth
We're commenting on an article that says the exact same thing.
Economic theory says some things are theoretically impossible, no literally, but economic theory wouldn't say that here:
The local housing market is much more complex than supply and demand, with larger economic factors (e.g., interest rates), very imperfect information (affecting everyone from buyers, to sellers, real estate agents, lenders, etc.), coordination by landlords (e.g., RealPage), non-economic factors such as prejudice (or just a co-op board!), government actions, larger trends, temporary inefficiencies, etc.
Economic theory is useful, but it does not predict or circumscribe the immediate reality of individuals. Life is much more complicated than that.
Second, many factors are involved in a complex market; you and I don't know how much effect the supply had in this case. That you are interested in that input isn't evidence of its effect.