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Can pouring money to buy housing possibly lower prices on housing? I want to understand, because it seems to me that supply and demand works some other way. Pe

Can pouring money to buy housing possibly lower prices on housing? I want to understand, because it seems to me that supply and demand works some other way. Perhaps increasing supply by developing tech or fighting regulations will be better way to spend money

onion2k 8y ago
From the article; It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents. Microsoft are increasing the supply of affordable housing by literally paying to build affordable housing. That increase in supply might lower prices, or it might just attract more people to the area and raise demand as well. Either way it makes the area better for Microsoft and its employees.
- acct1771 8y ago
  This will create affordable housing for the same reason Bill Gates philanthropic initiatives create a cheap labor force for Microsoft.
netcan 8y ago
Those sorts of issues can be very different depending on the specific market. In some places, the biggest issue for affordable housing is just getting more stock built within the right price bracket. Eg, a city might have plenty of large detached houses, and expensive high-rise residential buildings but not enough of the more affordable type of buildings like "low rise" developments of 60-100sqm flats. For analogy, imagine a world with plenty of iphones, but not enough cheap androids. A €200 phone is a decent phone, affordable and €200 is a viable price for the OEM. Subsidies aren't required. For phones, these market conditions guarantee that the supply will be sufficient. In real estate, they don't. Markets like this will tend to show really price/sqm at the lower end, relative to the higher. Eg a fancy, 250sqm house costs just 2x of an old 65sqm flat even though land and building costs are the same per sqm.

onion2k 8y ago

From the article; It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents. Microsoft are increasing the supply of affordable housing by literally paying to build affordable housing. That increase in supply might lower prices, or it might just attract more people to the area and raise demand as well. Either way it makes the area better for Microsoft and its employees.

acct1771 8y ago
This will create affordable housing for the same reason Bill Gates philanthropic initiatives create a cheap labor force for Microsoft.

netcan 8y ago

Those sorts of issues can be very different depending on the specific market. In some places, the biggest issue for affordable housing is just getting more stock built within the right price bracket. Eg, a city might have plenty of large detached houses, and expensive high-rise residential buildings but not enough of the more affordable type of buildings like "low rise" developments of 60-100sqm flats. For analogy, imagine a world with plenty of iphones, but not enough cheap androids. A €200 phone is a decent phone, affordable and €200 is a viable price for the OEM. Subsidies aren't required. For phones, these market conditions guarantee that the supply will be sufficient. In real estate, they don't. Markets like this will tend to show really price/sqm at the lower end, relative to the higher. Eg a fancy, 250sqm house costs just 2x of an old 65sqm flat even though land and building costs are the same per sqm.