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What do you think would happen to all that “luxury housing” if there wasn’t all the red tape and we allowed as much as the market could bear? In earlier eras t
by burlesona 7y ago
What do you think would happen to all that “luxury housing” if there wasn’t all the red tape and we allowed as much as the market could bear?
In earlier eras the answer was it didn’t stay luxury housing, but moved down market as shinier and newer buildings kept coming online, and as overeager developers built more fancy housing than there turned out to be a market for.
Then when you have all those landlords and more housing units than are needed, there’s price pressure all the way down, and a lot of upward mobility as people slide up into slightly nicer homes, leaving a bunch of reasonable quality homes open all the way to the bottom of the market.
We haven’t had anything like free market supply of housing since the FDR era, so this example is so far removed from living memory that most people can’t even imagine it.
- im_down_w_otp 7y agoThat has not been my observation from my environment or from the data over the last couple decades. Usually what happens, is in order to keep the asset value high they'll sit on vacancies for as long as they possibly can to avoid having to recognize a lower value on the property, until it becomes advantageous to do so as a write down after they're done leveraging themselves based on the inflated asset price.
- fiter 7y agoThe person you're replying to said that it hasn't been operating well since FDR, so they agree with you that. It sounds like something is wrong with lending if someone is willing to lend to them based on inflated asset prices!