https://en.wikipedia.org/wiki/Braess's_paradox seems even more relevant. Removing a "shortcut" road and traffic improving (or adding a shortcut and traffic getting worse) is very counterintuitive.
> Solving supply shortages with consumption subsidies. Say rent is expensive and the government gives everyone a $500/month rent voucher. What happens? Well, why is rent expensive? If people really want to live somewhere, they keep bidding with each other until the price hurts enough that some give up and live elsewhere.
I agree that the market rent will increase in this case, maybe even by as much as $500 / month in the case of perfectly constrained supply, but don't stop there! Keep going, and follow the logic. Eventually it will work, because eventually it creates such a powerful incentive for competing rental supply to enter the market.
> eventually it creates such a powerful incentive for competing rental supply to enter the market
But that only works if additional supply is allowed to enter the market--which in a situation where rent subsidies were even necessary in the first place, is overwhelmingly likely to not be the case.
In other words, the actual problem is that rents are too high. The correct "fix" if that is the case is to allow new supply to enter the market; but if you are doing that, rents won't be too high in the first place, because supply and demand are allowed to work. So if you actually have the problem of too high rents, it's because you aren't allowing supply and demand to work--and in that situation, subsidizing renters just makes the problem worse, by reducing the incentives of existing landlords to do anything to improve things.
I will add "Building roads to reduce traffic."
Edit: Just adding
Jevons paradox https://en.wikipedia.org/wiki/Jevons_paradox
and
https://news.ycombinator.com/item?id=39780949