3 ms·

>100% of the land that can pass the community review process is profitable to build on. The thing to look at isn't the after-the-fact windfall profits of succe

>100% of the land that can pass the community review process is profitable to build on. The thing to look at isn't the after-the-fact windfall profits of successfully getting through community review, but the forward-looking expected profits of trying to get through community review. You don't know ahead of time what will work - the profits from the ones that do have to fund the losses from trying and failing to get through community review, else the whole thing will consistently lose you money. Here's an advance prediction: the average profit from a successful project that gets through community review times the probability of success is roughly equivalent to the average loss from failing times the probability of failure.

random023987 9y ago
> The thing to look at isn't the after-the-fact windfall profits of successfully getting through community review, but the forward-looking expected profits of trying to get through community review. I'll concede that lower profits from developer-subsidized housing my drive fewer attempted community reviews, and I'll also concede that it's possible that more attempted community reviews could result in more housing being built. However, I still believe that the loss of profit from subsidized housing is not the significant factor holding back new construction; at least not when 3 bedrooms goes for 7 figures. Land costs and political friction currently dominate the equation; if you could easily buy a half acre and toss up 100 condos on it, the sale prices of those new condos would drop, and construction profits would become a pressing concern. (of course at that point housing would be affordable, so it's a moot point)
- ThrustVectoring 9y ago
  Yeah, there's many factors. It's not like removing subsidized housing would magically fix everything. It would make things better at the margin overall, more than the wealth transfer from developers to subsidized housing lottery winners.

random023987 9y ago

> The thing to look at isn't the after-the-fact windfall profits of successfully getting through community review, but the forward-looking expected profits of trying to get through community review. I'll concede that lower profits from developer-subsidized housing my drive fewer attempted community reviews, and I'll also concede that it's possible that more attempted community reviews could result in more housing being built. However, I still believe that the loss of profit from subsidized housing is not the significant factor holding back new construction; at least not when 3 bedrooms goes for 7 figures. Land costs and political friction currently dominate the equation; if you could easily buy a half acre and toss up 100 condos on it, the sale prices of those new condos would drop, and construction profits would become a pressing concern. (of course at that point housing would be affordable, so it's a moot point)

ThrustVectoring 9y ago
Yeah, there's many factors. It's not like removing subsidized housing would magically fix everything. It would make things better at the margin overall, more than the wealth transfer from developers to subsidized housing lottery winners.