> And why would a developer choose to build in a cheap area for lower rents when they can get higher ROI on everything but the land costs if they build luxury h

> And why would a developer choose to build in a cheap area for lower rents when they can get higher ROI on everything but the land costs if they build luxury housing in an expensive area? I would argue this is a false choice: very few developers have the capital to build luxury housing in expensive areas. For example, I know a guy who builds lower-end housing in Philadelphia (among other places). He would never consider building anything in Manhattan, simply because he can't afford to tie up the capital it would take to build even a townhouse-scale project. Lower-end is his game, period - only a small handful of mega-developers get to make the kind of choice you propose. By the way, he lives in New York, and logically/logistically it would make more sense for him to build in New York than Philadelphia, but the economics of lower-end development in New York are prohibitive. Once in a while a good opportunity will come along here, but to pay the bills and not be idle he has to look elsewhere. > I'm not convinced that the biggest obstacles to affordable housing in the city are about zoning or safety regulations. (Some of which, btw, ARE necessary for the sake of, yanno, people not dying.) Yes, I totally agree on safety regulations (I don't think I cited them as an issue, did I?). I don't think they are a primary driver of the cost of building in New York vs. other cities. Logistics of operating in the nation's densest city, yes; safety regulations unique to New York, probably no. Zoning, on the other hand... I think it's a bigger restriction than most people realize. My favorite illustration of the zoning issue is this article: http://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html http://www.nytimes.com/interactive/2016/05/19/upshot/forty-p...