Supply Constraints Are Not Valid Instrumental Variables for Home Prices Because They Are Correlated with Many Demand Factors

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Housing Price Booms and Crowding-Out Effects in Bank Lending (2018, background): “These factors would include differences in housing desirability (as raised by Davidoff (2016)) and the cost of land as an input in the firm’s production decision.”
Housing Wealth Effects: The Long View (2018, unknown): “Davidoff (2016) has critiqued this approach, pointing out that the Saiz elasticity is correlated with measures of long-run demand growth: there has been a secular trend over several decades favouring coastal cities that have relatively high land-unavailability.”
Urban revival in America (2020, unknown): “Davidoff (2016) shows that geographical supply constraints are correlated with demand factors and that constrained cities like New York and San Francisco also have more productive workers.”
Does Climate Change Affect Real Estate Prices? Only If You Believe In It (2020, unknown): “This spatial feature of our equilibrium also distinguishes our work from the literature of search frictions in the housing market, such as Piazzesi and Schneider (2009), Favara and Song (2014), and Piazzesi and Stroebel (2015).5 Models of search frictions can rationalize the empirical fact that tran”