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i get all that, and i'm not against this change generally, but i'm wondering about whether the savings are actually passed-through or does the developer/owner c

i get all that, and i'm not against this change generally, but i'm wondering about whether the savings are actually passed-through or does the developer/owner capture that value? i'm skeptical that (most of) the savings accrues to the renter.

jaredklewis 7y ago
Why wouldn't the savings/costs be passed along to the consumer as in every other segment of the market? If I am a strawberry seller and my cost to buy strawberries goes down, I can pass those savings onto the consumer or not. But my competitors will all be making the same choice, so absent collusion, if I don't lower my prices, but my competitors do, then obviously they'll take my business. In other words, profit margins are determined by how competitive a market is, not the cost of production. If this change goes through, I imagine that profit margins for LA developers will remain similar to whatever they are now.
- mktmkr 7y ago
  I think you are overstating the case that the market will pass this saving through. In reality there is some market-clearing price for a dwelling without a parking space and there's nothing the developer can do to influence it. This is the same reason that it's actually not possible to "build affordable housing" as many people demand. Yes you can build the housing but there's nothing you can do about the price it then commands.
  - clairity 7y ago
    right, my skepticism was about the actual market dynamics and the forces that might compel pass-through savings via competition, not the econ 101 idealization of commodity markets.
pwthornton 7y ago
They are passed through, particularly for residential. When apartments and condos require 1-2 parking spaces per unit, it means that we aren't selling to people without cars, who are often people who can't afford cars. My old unit in the DC area had something like $80,000 in parking attached to it. That could have been ground floor units or retail instead. The units would have been cheaper had the parking minimums not been there. In bigger buildings that put parking underground, those units can be very expensive to build.

jaredklewis 7y ago

Why wouldn't the savings/costs be passed along to the consumer as in every other segment of the market? If I am a strawberry seller and my cost to buy strawberries goes down, I can pass those savings onto the consumer or not. But my competitors will all be making the same choice, so absent collusion, if I don't lower my prices, but my competitors do, then obviously they'll take my business. In other words, profit margins are determined by how competitive a market is, not the cost of production. If this change goes through, I imagine that profit margins for LA developers will remain similar to whatever they are now.

mktmkr 7y ago
I think you are overstating the case that the market will pass this saving through. In reality there is some market-clearing price for a dwelling without a parking space and there's nothing the developer can do to influence it. This is the same reason that it's actually not possible to "build affordable housing" as many people demand. Yes you can build the housing but there's nothing you can do about the price it then commands.
- clairity 7y ago
  right, my skepticism was about the actual market dynamics and the forces that might compel pass-through savings via competition, not the econ 101 idealization of commodity markets.

pwthornton 7y ago

They are passed through, particularly for residential. When apartments and condos require 1-2 parking spaces per unit, it means that we aren't selling to people without cars, who are often people who can't afford cars. My old unit in the DC area had something like $80,000 in parking attached to it. That could have been ground floor units or retail instead. The units would have been cheaper had the parking minimums not been there. In bigger buildings that put parking underground, those units can be very expensive to build.