9 ms·

No, because there is too much money to be made in the living space supply squeeze.

by ipnon 5y ago

smt88 5y ago
That's assuming the people who own commercial real estate also own a lot of residential real estate, which is not the case. The actual problem is that it costs an enormous amount of money to retrofit commercial properties as residential. Source: currently have dozens of commercial RE clients
- Tempest1981 5y ago
  I'm thinking kitchens, showers, walls... fire safety (windows, exits). Are those the big items? Edit: from the SFChron article mentioned above: > “Finding the deal for us is almost like the needle in the haystack,” he said. “We had to basically build a brand-new building within a building. It’s not for the faint of heart.” > > Each apartment at 229 Ellis St., ranging from 180 to 300 square feet, cost around $400,000 to build out, less than ground-up construction. Seems expensive for that tiny of a space.
  - smt88 5y ago
    As far as I know, the biggest problems are converting plumbing, heating/cooling, and electrical from a communal (often open-office) setup to individual units. Office buildings are often concrete with drop ceilings to make it easy to access sprinklers, wiring, and pipes, but you would still need to run all of those things across every floor of the building. A single, modern condo likely has 2+ full baths, so if you're trying to get 10 units per floor, you're going to do that work 20+ times. Kitchens are also difficult, yes. You need to be able to vent heat and smoke, and you need different electrical wiring in most cases. Then think about ceilings. Drop ceilings are not appealing to most people, so you need a solution for that. Even if you keep the drop ceiling and just use a nicer tile, you're still spending $5-$30/sqft. Walls aren't that expensive, but you need a lot of them to convert back from the trendy open-office plans that most buildings have. There's also a lot of legal work to convert to condos (assuming you don't want to do rentals, which most of these office owners absolutely don't want to do). There's just a much bigger difference between office and residential space than people realize, I think.
  - deleted 5y ago
    [deleted]
- imtringued 5y ago
  No, the point is home owners turn residential zoning into hell but leave commercial zoning alone. The reason is that more commercial zoning leads to more jobs which strengthens the monopoly power of the home owner.
1270018080 5y ago
People who aren't already in the housing industry want a piece of that pie though. Supply vs demand solves the problem.
- dredmorbius 5y ago
  Not if constraining supply inflates asset values more than increasing it does. And in the case of land, this appears to be the case. Even if that's only an illusory belief, it's still a determinative one in constraining supply. Though that may be starting to change: "After Years of Failure, California Lawmakers Pave the Way for More Housing" To ease an affordability crisis, the Legislature voted to open suburbs to development, allowing two-units on lots long reserved for single-family homes. https://www.nytimes.com/2021/08/26/business/california-duplex-senate-bill-9.html https://www.nytimes.com/2021/08/26/business/california-duple... (https://news.ycombinator.com/item?id=28319169 https://news.ycombinator.com/item?id=28319169) I'm still skeptical the roadblock's been cleared. But the noise about fixing the problem's getting louder, at least.
  - imtringued 5y ago
    This just shows that all the finger pointing of developed countries about corruption in developing nations is misguided. The only difference between them and us is that our development phase happened sooner than theirs. Our developed nation governments are often just as corrupt but the negative impact of their corruption is waning as individuals get wealthier. Those with newly found wealth then commit their own small time corruption (land is a pretty good example).
- onlyrealcuzzo 5y ago
  Zoning limits supply much more than demand.
- France_is_bacon 5y ago
  I don't think supply and demand works at all. At all. For example, universities and hospital bills have shot up way more than inflation, just huge. You'd think that would lead to more competition and lower prices, but no way. Where are this inexpensive accredited universities that charge half the price? Where are the new hospitals that charge half the price? The only thing that actually goes down are real wages. Companies will gladly pay a lot for real estate, inventory, whatever, but not the employees. Minimum wage in 1979 was $2.35, which is $8.84 in today's dollars. The minimum federal wage now is $7.25. From the 1930's to 1985, the top tax bracket was 70-90% taxes. The rich get richer. Bill Gates, Jeff Bezos, Sergy Brinn and Larry Page, Tim Cook, Larry Ellison, and the rest of the immoral patrol.

No, because there is too much money to be made in the living space supply squeeze.

by ipnon 5y ago

No, because there is too much money to be made in the living space supply squeeze.

That's assuming the people who own commercial real estate also own a lot of residential real estate, which is not the case. The actual problem is that it costs an enormous amount of money to retrofit commercial properties as residential. Source: currently have dozens of commercial RE clients

Tempest1981 5y ago
I'm thinking kitchens, showers, walls... fire safety (windows, exits). Are those the big items? Edit: from the SFChron article mentioned above: > “Finding the deal for us is almost like the needle in the haystack,” he said. “We had to basically build a brand-new building within a building. It’s not for the faint of heart.” > > Each apartment at 229 Ellis St., ranging from 180 to 300 square feet, cost around $400,000 to build out, less than ground-up construction. Seems expensive for that tiny of a space.
- smt88 5y ago
  As far as I know, the biggest problems are converting plumbing, heating/cooling, and electrical from a communal (often open-office) setup to individual units. Office buildings are often concrete with drop ceilings to make it easy to access sprinklers, wiring, and pipes, but you would still need to run all of those things across every floor of the building. A single, modern condo likely has 2+ full baths, so if you're trying to get 10 units per floor, you're going to do that work 20+ times. Kitchens are also difficult, yes. You need to be able to vent heat and smoke, and you need different electrical wiring in most cases. Then think about ceilings. Drop ceilings are not appealing to most people, so you need a solution for that. Even if you keep the drop ceiling and just use a nicer tile, you're still spending $5-$30/sqft. Walls aren't that expensive, but you need a lot of them to convert back from the trendy open-office plans that most buildings have. There's also a lot of legal work to convert to condos (assuming you don't want to do rentals, which most of these office owners absolutely don't want to do). There's just a much bigger difference between office and residential space than people realize, I think.
- deleted 5y ago
  [deleted]
imtringued 5y ago
No, the point is home owners turn residential zoning into hell but leave commercial zoning alone. The reason is that more commercial zoning leads to more jobs which strengthens the monopoly power of the home owner.

1270018080 5y ago

People who aren't already in the housing industry want a piece of that pie though. Supply vs demand solves the problem.

dredmorbius 5y ago
Not if constraining supply inflates asset values more than increasing it does. And in the case of land, this appears to be the case. Even if that's only an illusory belief, it's still a determinative one in constraining supply. Though that may be starting to change: "After Years of Failure, California Lawmakers Pave the Way for More Housing" To ease an affordability crisis, the Legislature voted to open suburbs to development, allowing two-units on lots long reserved for single-family homes. https://www.nytimes.com/2021/08/26/business/california-duplex-senate-bill-9.html https://www.nytimes.com/2021/08/26/business/california-duple... (https://news.ycombinator.com/item?id=28319169 https://news.ycombinator.com/item?id=28319169) I'm still skeptical the roadblock's been cleared. But the noise about fixing the problem's getting louder, at least.
- imtringued 5y ago
  This just shows that all the finger pointing of developed countries about corruption in developing nations is misguided. The only difference between them and us is that our development phase happened sooner than theirs. Our developed nation governments are often just as corrupt but the negative impact of their corruption is waning as individuals get wealthier. Those with newly found wealth then commit their own small time corruption (land is a pretty good example).
onlyrealcuzzo 5y ago
Zoning limits supply much more than demand.
France_is_bacon 5y ago
I don't think supply and demand works at all. At all. For example, universities and hospital bills have shot up way more than inflation, just huge. You'd think that would lead to more competition and lower prices, but no way. Where are this inexpensive accredited universities that charge half the price? Where are the new hospitals that charge half the price? The only thing that actually goes down are real wages. Companies will gladly pay a lot for real estate, inventory, whatever, but not the employees. Minimum wage in 1979 was $2.35, which is $8.84 in today's dollars. The minimum federal wage now is $7.25. From the 1930's to 1985, the top tax bracket was 70-90% taxes. The rich get richer. Bill Gates, Jeff Bezos, Sergy Brinn and Larry Page, Tim Cook, Larry Ellison, and the rest of the immoral patrol.