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It's true, if there were more supply, the prices could theoretically come down, but I've rarely seen a cheap apartment in a skyscraper. Usually developers woul

by cbanek 10y ago

It's true, if there were more supply, the prices could theoretically come down, but I've rarely seen a cheap apartment in a skyscraper. Usually developers would only build such a thing if they can make a huge amount of money and get the highest (or at least current) rates for most of the occupancy. In short, people would stop building skyscrapers once they didn't make financial sense anymore for the developer, and that doesn't necessarily mean when it's affordable for a tenant.

user5994461 10y ago
At first skyscrapers (or generally new housing) are expensive. They attract the more wealthy people, freeing their current locations for other people. That makes a lot of new housing, which is always good when there isn't enough. The effects comes in later. People with enough money to afford the best new buildings refuse to live in the older ones. The price of the older places go down (or at least is put down by the new building). Fast forward 30 years. The "old skyscrapers" are not the best place anymore, there are newer better places, they become more affordable, while the newest place is more expensive. (who knows what will be the expected standard of living in 30 years?) That's long term planning. You need luxury skyscrapers now to control pricing later for the cheaper buildings.
- cbanek 10y ago
  This of course assumes the rent for older places goes down, but it seems like rents are kept artificially high (well the last person paid X) and almost never go down for a region. Over time I agree, that economics will take over, as long as there aren't even more people wanting to move in, but that doesn't seem likely.
  - user5994461 10y ago
    Well, I know secondary cities where the price are going down. Over time, the new constructions pushed down the prices of the older ones. In SF/NY. There is so much immigration and lack of housing that prices won't go down any time soon, but the rise would at least be slowed down by new taller buildings.
aianus 10y ago
> Usually developers would only build such a thing if they can make a huge amount of money and get the highest (or at least current) rates for most of the occupancy. A nice (but small) two bedroom apartment in a brand new skyscraper condo in Toronto costs ~CAD$2400/mo to rent. Not cheap, but less than half of what a (much) shittier place costs in SF.

by cbanek 10y ago

user5994461 10y ago

At first skyscrapers (or generally new housing) are expensive. They attract the more wealthy people, freeing their current locations for other people. That makes a lot of new housing, which is always good when there isn't enough. The effects comes in later. People with enough money to afford the best new buildings refuse to live in the older ones. The price of the older places go down (or at least is put down by the new building). Fast forward 30 years. The "old skyscrapers" are not the best place anymore, there are newer better places, they become more affordable, while the newest place is more expensive. (who knows what will be the expected standard of living in 30 years?) That's long term planning. You need luxury skyscrapers now to control pricing later for the cheaper buildings.

cbanek 10y ago
This of course assumes the rent for older places goes down, but it seems like rents are kept artificially high (well the last person paid X) and almost never go down for a region. Over time I agree, that economics will take over, as long as there aren't even more people wanting to move in, but that doesn't seem likely.
- user5994461 10y ago
  Well, I know secondary cities where the price are going down. Over time, the new constructions pushed down the prices of the older ones. In SF/NY. There is so much immigration and lack of housing that prices won't go down any time soon, but the rise would at least be slowed down by new taller buildings.

aianus 10y ago

> Usually developers would only build such a thing if they can make a huge amount of money and get the highest (or at least current) rates for most of the occupancy. A nice (but small) two bedroom apartment in a brand new skyscraper condo in Toronto costs ~CAD$2400/mo to rent. Not cheap, but less than half of what a (much) shittier place costs in SF.