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Maybe if the property owners were allowed to build more housing the competition wouldn’t be as intense.
by swiley 5y ago
Maybe if the property owners were allowed to build more housing the competition wouldn’t be as intense.
- benrbray 5y agoIsn't it normally the property owners who rally against new housing developments to artificially raise the value of their own property?
- CryptoPunk 5y agoI don't see how your assertion contradicts OP's. A regulation barring more dense developments solves the defection problem that a pact between property owners in a free market would have. As long as the free market persists, then even if all property owners would benefit from fewer new developments, they have no practical way to enforce a pact to not build new developments, so their situation is a prisoner's dilemna where the best option is to build. The same principle applies to price cutting. If all companies could enforce a pact to not cut prices, then they could extract economic rent via above-market prices and inflated profit margins, but absent government enforced price floors, the best strategy for any given company is to reduce prices to gain market share, to the extent that their production costs allow.