Waymo has just been granted approval to test its autonomous vehicles in New York City. The permit allows up to eight of the company's Jaguar SUVs to circulate in Manhattan and downtown Brooklyn. And according to the company, the plan is to start "immediately." This first approval only runs until the end of September, after which it will need to be extended — but I'm guessing that shouldn't be too difficult to obtain.

What's noteworthy about this announcement is that (1) New York City is a big and complex place and (2) it's the first city for Waymo that receives snow. The company currently operates in San Francisco, Austin, Phoenix, and Los Angeles.

That said, the company has been doing cold weather testing since, I think, 2012. And in 2016, they opened a 53,000-square-foot self-driving center in Michigan for this purpose. They've also run tests in Truckee, California, Upstate New York, and the Detroit area. So presumably its sensors are ready to melt snow and ice. But it's looking like the true test will be on the streets of New York.

Next should be Toronto.

Those of us in the yes-in-my-backyard camp like to point out that increased housing supply is good for the overall health of a market because it moderates price and rental growth. And to point out just one example, there's evidence of this happening right now in Austin.

But one of the common objections to this mental model is that the new housing getting built is simply not affordable. It's high-income housing. So how is that helpful to someone who maybe can't afford the rents? And to be fair, this is generally true (unless there are subsidies involved that are allowing the homes to be offered at below-market pricing).

The reason this is true is because development "happens on the margin." Meaning, virtually every new project just barely makes economic sense to build. Developers have to be very precise about their costs and often have to embed some degree of optimism into their revenue assumptions in order to arrive at feasibility. This means that new home prices and rents are almost always at the very top end of what's achievable in a market.

But this market reality doesn't just benefit the people who can afford high-income housing. For one thing, brand new expensive housing eventually becomes older and more affordable housing (this is referred to as filtering). But even in the immediate term, new supply serves the important function of relieving some of the pressures on a city's existing housing stock.

Think of this way: If you're a high-income household that could afford new housing — if only it were being built and available — well then you're just going to seek out the next best thing. And because you're a high-income household, you have the ability to outbid middle-income households for whatever housing happens to be available on the next rung of the ladder.

This is what the research shows. In a recent study by Pew, it was found that building more housing — both across a metro area and in specific neighborhoods — tempers rents across all classes of buildings. Importantly, though, it was found to decrease rents the most for older, more affordable housing: