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What would happen is that developers would buy up blocks of housing, demolish them all, and build more luxury units. The average owner of a single-family home
by danudey 11y ago
What would happen is that developers would buy up blocks of housing, demolish them all, and build more luxury units.
The average owner of a single-family home can't afford to demolish it and build a new block of flats. All this would accomplish is to make it financially feasible to buy up single-family homes and build more luxury units in them, concentrating even more wealth in the hands of property developers.
This is basically exactly what's happening in Vancouver; build a condo tower that starts at $1m/unit, it gets bought by either the rich elite or property speculators (or individuals attempting to 'hide' their wealth in other countries), and then sits idle. Even with rent control, new housing being built is predominantly geared towards the upper class, or the top end of the upper middle class. Property values go up, and the only thing keeping rents even remotely reasonable is the rent controls.
Then, because rent is controlled, property values are kept lower than they would otherwise be, because the 'buy-and-rent' landlords can't pay for a mortgage that costs less than market rates for rent, so fewer landlord tycoons buy as many units. This means lower mortgages and more supply for people who actually want to purchase a home and have actual security.
Your proposal would still concentrate power in the hands of developers and landlords; developers would buy up all the houses that would sell, knock them down to build rental units, and then, if rents risked dropping 'too low', they'd stop building for a while and just hold on to the properties.
- rahimnathwani 11y ago"All this would accomplish ... build more luxury units ... concentrating even more wealth in the hands of property developers." Building more units is the point. Having enough supply that anyone can afford (to rent) a place to live is the point. I don't see how concentration of wealth is relevant here. "This is basically exactly what's happening in Vancouver" Vancouver has plenty of undeveloped and underdeveloped land. Supply of residential units available for new renters is constrained by (1) rent controls, (2) NIMBYism preventing new homes near existing homes, (3) the city government not wanting to re-zone industrial land as residential. A luxury $1m condo isn't that price due to something inherent in the condo. It's due to its location and the supply/demand in the city. The same condo in Detroit wouldn't cost the same. Additional supply (of whatever types of units) would increase supply and, by definition, allow more people to afford to live in the area.
- mjevans 11y agoIt's in the public interest to have more population density and more units that will keep the pressure of competition high. It makes sense to provide incentive for desired development. Urban planning should balance office, housing, and retail space. The city/locality/region/nation should make those desires public, and if there is an imbalance incentive should be provided to correct it. This might be a tax incentive, or it could be financing conditional on some most units always being beneath market median as well as only a limited spread in rent difference. Planning might also want to focus on building a city at more than just a /building/ level. It makes sense to have parking at the edges and covered walkways, maybe with 'people mover' belts (like at airports and theme parks) for major routes. This would make for safer streets and more efficient pedestrian commutes.
- rahimnathwani 11y ago"covered walkways, maybe with 'people mover' belts" Like in Hong Kong: https://en.wikipedia.org/wiki/Central%E2%80%93Mid-Levels_escalator_and_walkway_system https://en.wikipedia.org/wiki/Central%E2%80%93Mid-Levels_esc...