Namgodtoh t1_issa916 wrote on October 18, 2022 at 10:14 AM

Reply to comment by Codspear in Rent going up? One company’s algorithm could be why by anurodhp

Who are these people and why would they build if not to rent? Banks are not going to finance projects with low/no returns.

I agree that we need more ownable housing stock but we are well entrenched in what is essentially a feudal system of property ownership out here. Without some fairly radical alternatives the system will not self-correct.

Codspear t1_issaqp1 wrote on October 18, 2022 at 10:20 AM

Condos allow for a near-instant payoff for developers when they sell the units, whereas apartments are sold to a management company that has to hold significant debt for a decade or more. Even if you just allow for far more apartments though, you get to the point where there are more units than renters and then landlords have to compete in lowering rents to attract tenants. See 2020 in Boston as an example where many places were slashing rents and offering perks like a free month because so many tenants were abandoning the city.

Namgodtoh t1_issbgqb wrote on October 18, 2022 at 10:30 AM

Such a high risk though, that I doubt many would be quick to take. Construction is slow, and costs have been very unpredictable since COVID. Couple that with interest rates rising and what we're left looking for is some benevolent millionaires to build quality affordable housing?

Codspear t1_issygz2 wrote on October 18, 2022 at 2:03 PM

They don’t need to build affordable housing, just more housing of any kind. New mid-range condos would probably be in the $$300k - 400k range within 128 if we didn’t add so many ridiculous costs to every development and built enough of them. The affordable housing is what all these new units will be in a few decades. Our current lack of affordable housing is due to the massive underdevelopment of new housing over the past few decades.

ReferenceAny4836 t1_isu9xyh wrote on October 18, 2022 at 7:18 PM

It would be fairly simple in a functioning country to setup a government program that provided price stability for long-term construction projects. Since housing is such a large proportion of inflation metrics, increasing housing supply would also help stabilize prices and eliminate the need for such a program in the long run. Alas we are living in a failed state.

I am constantly amazed by the lack of imagination in America for anything good ever happening again. It is such a subtle and profound aspect of American collapse. The country that put a man on the moon, can't figure out how to build some condos or a damn train. It's astounding. They made more progress on high speed rail 100 years ago with the Lackawanna Cutoff, than California has after 20 years and billions of dollars wasted. Learned helplessness while the banksters pick our pockets and laugh. This country cannot balkanize fast enough if you ask me. The nation of New England wouldn't be so pathetic without the shithole states dragging us down.

WildZontars t1_isspm3h wrote on October 18, 2022 at 12:54 PM

LVT would fix this

Local_Stuff_Acct t1_issxksr wrote on October 18, 2022 at 1:57 PM

Potentially they would build apartments to sell condos at a profit, but yes they may also build them to rent.

Either way, if we stopped artificially restricting the construction of new housing units, landlords and developers would have to be what they currently claim they are: efficient members of the economy providing housing at the minimum marginal cost of production and maintenance.