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What's wrong is that there is no profit in selling real estate and housing at below market value, by definition. And in places like the bay, market rents are no

What's wrong is that there is no profit in selling real estate and housing at below market value, by definition. And in places like the bay, market rents are not affordable to an increasingly large population. Hence, the greedy perception. Developers are acting in self interest and the old system of financing predicated continuous wage growth.

WalterBright 7y ago
Not building towers will result in even higher prices for housing.
- MrAlex94 7y ago
  At least in the UK the price per square foot greatly increases after each new build that replaces an older one. Surely prices would go down? You can even verify yourself. Go on a property portal such as Zoopla or Rightmove and compare the cost of a new build and old build in the same area. I have yet to find one where the new build is cheaper per square foot.
  - CalRobert 7y ago
    Of course, people like newer things. But how was the cost of surrounding old builds affected?
    - MrAlex94 7y ago
      > But how was the cost of surrounding old builds affected? Not sure I understand? Edit: Anyway, the poster I was replying to was making the point that these towers are alleviating demand and subsequently pushing prices down, which is not happening.
      - WalterBright 7y ago
        That is not what I wrote. I said the prices with the tower would be lower than prices without the tower, which is not the same as saying prices would decline. I.e. relative vs absolute.
        MrAlex94 7y ago
        https://content.knightfrank.com/research/478/documents/en/2012-1101.pdf https://content.knightfrank.com/research/478/documents/en/20... This research shows that there’s an average of 1.5% price increase per floor. Care to share a counter-claim source?
        WalterBright 7y ago
        Increasing the supply of something simply does not cause price increases. If the price increases, it's because demand is increasing even faster than supply.
        MrAlex94 7y ago
        At this point there’s no way you aren’t pulling my leg. The research paper showed that increasing the amount of floors increases the price per floor. Are you saying that these towers control demand? So if they lower the amount of floors then suddenly demand is going down because they are cheaper? Also I do hope you know the context of my posts relate to the UK market?
        CalRobert 7y ago
        People like living high above traffic. There's a reason penthouse apartments are at the top.
        MrAlex94 7y ago
        Bar the main roads, there’s not a lot of traffic down residential streets in London.
      - CalRobert 7y ago
        I meant "people who might have bought an old home instead went to the new one". If I have a market of 10 dumpy old cars, people will pay X for it. If I destroy 1 dumpy old car and add 2 brand new cars, people will pay more for the new cars (like your new building) but the dumpy old ones will be slightly cheaper.
  - WalterBright 7y ago
    Prices will still rise if demand is increasing faster than supply. If supply remained constant, the prices would rise even faster.
MrAlex94 7y ago
Sorry I’m talking in relation to the UK. It’s a much different reason for high prices here than somewhere such as SFO.

WalterBright 7y ago

Not building towers will result in even higher prices for housing.

MrAlex94 7y ago
At least in the UK the price per square foot greatly increases after each new build that replaces an older one. Surely prices would go down? You can even verify yourself. Go on a property portal such as Zoopla or Rightmove and compare the cost of a new build and old build in the same area. I have yet to find one where the new build is cheaper per square foot.
- CalRobert 7y ago
  Of course, people like newer things. But how was the cost of surrounding old builds affected?
  - MrAlex94 7y ago
    > But how was the cost of surrounding old builds affected? Not sure I understand? Edit: Anyway, the poster I was replying to was making the point that these towers are alleviating demand and subsequently pushing prices down, which is not happening.
    - WalterBright 7y ago
      That is not what I wrote. I said the prices with the tower would be lower than prices without the tower, which is not the same as saying prices would decline. I.e. relative vs absolute.
      - MrAlex94 7y ago
        https://content.knightfrank.com/research/478/documents/en/2012-1101.pdf https://content.knightfrank.com/research/478/documents/en/20... This research shows that there’s an average of 1.5% price increase per floor. Care to share a counter-claim source?
        WalterBright 7y ago
        Increasing the supply of something simply does not cause price increases. If the price increases, it's because demand is increasing even faster than supply.
        MrAlex94 7y ago
        At this point there’s no way you aren’t pulling my leg. The research paper showed that increasing the amount of floors increases the price per floor. Are you saying that these towers control demand? So if they lower the amount of floors then suddenly demand is going down because they are cheaper? Also I do hope you know the context of my posts relate to the UK market?
        CalRobert 7y ago
        People like living high above traffic. There's a reason penthouse apartments are at the top.
        MrAlex94 7y ago
        Bar the main roads, there’s not a lot of traffic down residential streets in London.
    - CalRobert 7y ago
      I meant "people who might have bought an old home instead went to the new one". If I have a market of 10 dumpy old cars, people will pay X for it. If I destroy 1 dumpy old car and add 2 brand new cars, people will pay more for the new cars (like your new building) but the dumpy old ones will be slightly cheaper.
- WalterBright 7y ago
  Prices will still rise if demand is increasing faster than supply. If supply remained constant, the prices would rise even faster.

MrAlex94 7y ago

Sorry I’m talking in relation to the UK. It’s a much different reason for high prices here than somewhere such as SFO.