3 ms·

But then that just means the area isn't high density enough, right? High density means greater supply. As supply increases, you would expect that the cost of a

But then that just means the area isn't high density enough, right? High density means greater supply. As supply increases, you would expect that the cost of a flat will decrease, except if value had been created by increasing the density. I think value will be created by increasing the density initially; consider the extreme case of city property value versus country-side property value. That can only keep happening up to a certain point, of course. It seems most places haven't found that ceiling yet. As you mentioned, high density to you implies high cost. That's because the density isn't yet high enough.

bluGill 7y ago
Not exactly. A manufactured Single family house (ie trailer house) is about the cheapest building you can make for a family. However the construction doesn't scale at all: it isn't strong enough to go up and for fire reasons there needs to be a gap between units. The next level of construction (which can still be manufactured but needs more onsite setup so traditional on site is competitive) costs more to build, and it scales somewhat linearly to about 5 floors. Then you get a price jump. In short, the highest density cannot be as cheap as the mid density because the rent you need to justify that level of building must be higher than the middle levels. On the other hand, 5 floors is much larger than most areas have. There is plenty of room to grow denser without crossing that limit. There are also sticky factors. It costs a lot of money to build something. If you already have a building your rent needs to be high to justify tearing down a perfectly good building and building larger. It is possible for rent to be increasing fast in a neighborhood with only a few more people who want to live there than there are units. So you risk building bigger only to discover you can't rent all your new apartments and rent drops for everybody as supply now exceeds demand.
- mywittyname 7y ago
  This is the reason affordable housing needs to be built 40 years ago. If a large apartment building was built in 1979 with a target rent price of $500/mo, that would have been considered a high-end development. Today, that building could (not necessarily will) provide low-income housing. As it would be paid off and $500/mo per unit could probably still provide enough money for maintenance and upkeep.
  - bluGill 7y ago
    Exactly. This is way CA can't solve their housing problems today even if they had the political will to correct all the mal-incentives they have put into place.
  - 0815test 7y ago
    As they say; the best time to build more affordable housing is 40 years ago... the second-best time is right now!
C1sc0cat 7y ago
I don't want to live in a coffin hotel :-) and the flats in red lion square are a high rise.

bluGill 7y ago

Not exactly. A manufactured Single family house (ie trailer house) is about the cheapest building you can make for a family. However the construction doesn't scale at all: it isn't strong enough to go up and for fire reasons there needs to be a gap between units. The next level of construction (which can still be manufactured but needs more onsite setup so traditional on site is competitive) costs more to build, and it scales somewhat linearly to about 5 floors. Then you get a price jump. In short, the highest density cannot be as cheap as the mid density because the rent you need to justify that level of building must be higher than the middle levels. On the other hand, 5 floors is much larger than most areas have. There is plenty of room to grow denser without crossing that limit. There are also sticky factors. It costs a lot of money to build something. If you already have a building your rent needs to be high to justify tearing down a perfectly good building and building larger. It is possible for rent to be increasing fast in a neighborhood with only a few more people who want to live there than there are units. So you risk building bigger only to discover you can't rent all your new apartments and rent drops for everybody as supply now exceeds demand.

mywittyname 7y ago
This is the reason affordable housing needs to be built 40 years ago. If a large apartment building was built in 1979 with a target rent price of $500/mo, that would have been considered a high-end development. Today, that building could (not necessarily will) provide low-income housing. As it would be paid off and $500/mo per unit could probably still provide enough money for maintenance and upkeep.
- bluGill 7y ago
  Exactly. This is way CA can't solve their housing problems today even if they had the political will to correct all the mal-incentives they have put into place.
- 0815test 7y ago
  As they say; the best time to build more affordable housing is 40 years ago... the second-best time is right now!

C1sc0cat 7y ago

I don't want to live in a coffin hotel :-) and the flats in red lion square are a high rise.