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The analysis is so obviously wrong, I can't imagine any of this is real. It assumes that rich entities will buy property at high prices in a soon-to-be buyer's

The analysis is so obviously wrong, I can't imagine any of this is real. It assumes that rich entities will buy property at high prices in a soon-to-be buyer's market. That they will not calculate ROI, will not predict market collapse and will easily loose money. The opposite, of course, is true. ROI will be meticulously calculated, bubble will not form. Development companies, unamused by weak demand will stop building long before there will be lots of unaffordable, unsellable housing. Which might be good: market forces at work.

shuckles 6y ago
The right way to understand Nathan, the author of the piece, is that - like many other rich kids of his class - they are disguising an aesthetic preference for cute old buildings with a material analysis which can justify that preference in light of their purported egalitarian values.
imtringued 6y ago
There is a flaw in your argument. If there is no demand for extremely expensive luxury apartments none of them will be built. The brain knot of luxury apartments making housing unaffordable doesn't even come into play because no luxury housing will be built.
makomk 6y ago
Yeah, as I recall we've seen this happen on the rare occasion cities built enough housing to cause the market to weaken. All the property companies stop building the moment it starts to happen because they know they're at risk of ending up with a load of housing they can only offload at a loss, and that can easily bankrupt them.
jefftk 6y ago
> The analysis is so obviously wrong Are you talking about my analysis, or Nathan Robinson's (who I'm responding to)?
- hamilyon2 6y ago
  Your analysis is wrong in assuming that when developers acquire permissions, demolish buildings, rent machinery and pour concrete, buyers still behave as if there is shortage of housing. Nathan Robinson's analysis might be wrong too, but it is still more nuanced.
  - strogonoff 6y ago
    Bubble or no bubble, builders are going to build. If luxurious units drop in value after housing supply is no longer restricted, builders will go with thinner margins and build less expensive housing, rather than… what, just exit the business altogether? If OP’s vision is correct, when luxurious high-density housing in SF becomes oversupplied it will drop in price. If your counter-argument is correct, in this scenario luxurious housing will never be built. I reckon other housing will, though, and it’ll likely be tall buildings with higher margins. Either way the answer seems clear: using speculative investment to argue against new housing is misguided.

shuckles 6y ago

The right way to understand Nathan, the author of the piece, is that - like many other rich kids of his class - they are disguising an aesthetic preference for cute old buildings with a material analysis which can justify that preference in light of their purported egalitarian values.

imtringued 6y ago

There is a flaw in your argument. If there is no demand for extremely expensive luxury apartments none of them will be built. The brain knot of luxury apartments making housing unaffordable doesn't even come into play because no luxury housing will be built.

makomk 6y ago

Yeah, as I recall we've seen this happen on the rare occasion cities built enough housing to cause the market to weaken. All the property companies stop building the moment it starts to happen because they know they're at risk of ending up with a load of housing they can only offload at a loss, and that can easily bankrupt them.

jefftk 6y ago

> The analysis is so obviously wrong Are you talking about my analysis, or Nathan Robinson's (who I'm responding to)?

hamilyon2 6y ago
Your analysis is wrong in assuming that when developers acquire permissions, demolish buildings, rent machinery and pour concrete, buyers still behave as if there is shortage of housing. Nathan Robinson's analysis might be wrong too, but it is still more nuanced.
- strogonoff 6y ago
  Bubble or no bubble, builders are going to build. If luxurious units drop in value after housing supply is no longer restricted, builders will go with thinner margins and build less expensive housing, rather than… what, just exit the business altogether? If OP’s vision is correct, when luxurious high-density housing in SF becomes oversupplied it will drop in price. If your counter-argument is correct, in this scenario luxurious housing will never be built. I reckon other housing will, though, and it’ll likely be tall buildings with higher margins. Either way the answer seems clear: using speculative investment to argue against new housing is misguided.