EPTalso, see this surprisingly informative overview of what happens with gentrification as done in cities:skylines.
US Politics Mega-thread - Page 1115
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ticklishmusic
United States15977 Posts
also, see this surprisingly informative overview of what happens with gentrification as done in cities:skylines. | ||
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Sbrubbles
Brazil5776 Posts
On February 13 2019 04:05 ticklishmusic wrote: the problem is the economics don't support that. a "luxury" apartment and a regular apartment cost about the same to build, but you can charge 50% more for one. from a profit standpoint, the choice is pretty obvious. beyond that, developers need to get financing from banks, who like the luxury stuff a lot more. also, see this surprisingly informative overview of what happens with gentrification as done in cities:skylines. https://www.youtube.com/watch?v=LdeirDrinWk One being more profitable than the other only matters if there are absolutely no areas left for construction. If there are, and there's demand for both kinds of housing, then construction companies would do both. Companies are after profit, not average roi. I'm no expert on the US construction sector, but from what I've read it's more a problem of excessive regulation and nimby advocacy | ||
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Plansix
United States60190 Posts
On February 13 2019 04:37 Sbrubbles wrote: One being more profitable than the other only matters if there are absolutely no areas left for construction. If there are, and there's demand for both kinds of housing, then construction companies would do both. Companies are after profit, not average roi. I'm no expert on the US construction sector, but from what I've read it's more a problem of excessive regulation and nimby advocacy As someone who deals in US real estate and the issue of housing, it is not regulation. There are only so many companies building housing in the state. Those companies only build what developers want and developers are only interested in maximum return on investment. Especially given the amount of money up front development requires. The demand exists, but the market does not serve that demand due to the limitations of labor, investors and local government being more interested in high income housing units. Now many would argue that if we reduced investment, the affordable housing would arrive. But that has never really happens. Instead you just get more high income housing with less oversight from the local community. The way my state handles it is there is reduced regulation for affordable housing ONLY. And those units have to be handled out through a lottery to assure they are going to people who need them. | ||
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Dangermousecatdog
United Kingdom7084 Posts
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ticklishmusic
United States15977 Posts
On February 13 2019 04:37 Sbrubbles wrote: One being more profitable than the other only matters if there are absolutely no areas left for construction. If there are, and there's demand for both kinds of housing, then construction companies would do both. Companies are after profit, not average roi. I'm no expert on the US construction sector, but from what I've read it's more a problem of excessive regulation and nimby advocacy the point is,why would ever sell something for x, when you could sell it for 2x? there is no incentive (unless the government offers one or something) to build lower cost housing when you could be building higher cost housing. in addition, having lower cost units drags down the amount you could get for a higher end one. regulation does play a role, but NIMBYism is a separate issue from gentrification. | ||
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Plansix
United States60190 Posts
Now building a new library because the old one was built in the 1950s and is a garbage heap, that is another story. | ||
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Sbrubbles
Brazil5776 Posts
On February 13 2019 05:03 ticklishmusic wrote: the point is,why would ever sell something that costs you x, when you could sell it for 2x? there is no incentive (unless the government offers one or something) to build lower cost housing when you could be building higher cost housing. in addition, having lower cost units drags down the amount you could get for a higher end one. regulation does play a role, but NIMBYism is a separate issue from gentrification. Why would you ever sell something for x, when you could sell it for 2x? When you can do both and it costs you less than x to make it. This is what I meant when I said "One being more profitable than the other only matters if there are absolutely no areas left for construction" | ||
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Simberto
Germany11905 Posts
On February 13 2019 05:23 Sbrubbles wrote: Why would you ever sell something for x, when you could sell it for 2x? When you can do both and it costs you less than x to make it. This is what I meant when I said "One being more profitable than the other only matters if there are absolutely no areas left for construction" Yeah, but you could also build the 2x thing at both places and make even more money. This only stops if either the demand for high-price housing is met (And you thus can no longer sell those 2x things), or if there are additional incentives that make building low-cost housing more attractive. Those additional incentives almost certainly have to be something the government does. | ||
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Plansix
United States60190 Posts
On February 13 2019 05:23 Sbrubbles wrote: Why would you ever sell something for x, when you could sell it for 2x? When you can do both and it costs you less than x to make it. This is what I meant when I said "One being more profitable than the other only matters if there are absolutely no areas left for construction" You do know the old saying "Invest in real estate, they are not making it any more." The number of areas that are available for construction are very limited. All the land is owned by someone and only a set amount of it is for sale at any given time. Its not like someone can just walk up and buy my house if they want to develop. I mean, they can, but they won't make a profit because my price is not reasonable at all. So when someone buys 10 lots for houses, they can only make 10 houses. If their margin will be 15%, there is no reason for them to make a 200K house when they can make a 500K house. Both will sell because that is the way real estate market is right now. So there is no reason to build affordable housing because the math doesn't work out and there are only 10 housing lots. | ||
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ticklishmusic
United States15977 Posts
On February 13 2019 05:23 Sbrubbles wrote: Why would you ever sell something for x, when you could sell it for 2x? When you can do both and it costs you less than x to make it. This is what I meant when I said "One being more profitable than the other only matters if there are absolutely no areas left for construction" i had a brain fart. meant to say that you would always sell for the higher price, etc. like simberto posted. | ||
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IyMoon
United States1249 Posts
It's not ohhh a lot are going up and a few low cost. it is every one. The average price for a 2 bedroom in these new places? 4k. Why in gods name would someone ever make a 2k 2 bedroom when they know people are buying up 4k ones? | ||
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ShoCkeyy
7815 Posts
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Gahlo
United States35173 Posts
On February 13 2019 06:13 ShoCkeyy wrote: Lol at "affordable" apartments in cities... It's all been Luxury + tax havens for off shore rich people. We're not just talking about downtown. Some of my friends are trying to find a new place and the rent are stupid right now. | ||
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JimmiC
Canada22817 Posts
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ticklishmusic
United States15977 Posts
On February 13 2019 06:48 JimmiC wrote: The down side of super low interest rates is housing has gone sky high because people make their decision not based on the value of the house but on the value of the payment. For good credit people with steady income this isn't a huge deal and lets them feel good about owning a Half million dollar home or whatever. For people not in that situation it sucks. i believe most home mortgages now are fixed rate, so that risk has been significantly mitigated. and on the adjustable rate side, i believe most banks conduct sensitivity tests to make sure that borrowers can still pay given an increase in the fed rate. | ||
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JimmiC
Canada22817 Posts
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Nouar
France3270 Posts
https://www.washingtonpost.com/climate-environment/2019/02/12/senate-just-passed-decades-biggest-public-lands-package-heres-whats-it/?utm_term=.ec4919bba992 On February 13 2019 07:11 JimmiC wrote: Oh yes the teaser rates were an absolute killer. But I am just talking in general. Like 4% for a home is incredibly low and will likely stay that wayish for the foreseeable future. 4% still sounds crazy nowadays. When I bought in 2011, I had lower than that even though the crisis was in full bloom, it's now down to around 1.5% for a 15-year loan here in France if you have ok credentials. | ||
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Dangermousecatdog
United Kingdom7084 Posts
On February 13 2019 07:11 JimmiC wrote: Oh yes the teaser rates were an absolute killer. But I am just talking in general. Like 4% for a home is incredibly low and will likely stay that wayish for the foreseeable future. I think you may have swopped low with high there. | ||
KwarK
United States44137 Posts
On February 13 2019 08:08 Nouar wrote: Finally, some good news from the Senate... A bipartisan bill on nature protection and national park extensions ! It's too rare not to mention. https://www.washingtonpost.com/climate-environment/2019/02/12/senate-just-passed-decades-biggest-public-lands-package-heres-whats-it/?utm_term=.ec4919bba992 4% still sounds crazy nowadays. When I bought in 2011, I had lower than that even though the crisis was in full bloom, it's now down to around 1.5% for a 15-year loan here in France if you have ok credentials. It also depends upon the relative rate of inflation. You can’t directly compare dollar denominated interest with euro denominated. | ||
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KwarK
United States44137 Posts
On February 13 2019 09:14 Dangermousecatdog wrote: I think you may have swopped low with high there. Nope. He’s just talking in dollars. | ||
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