3 ms·

Why not just let private developers build apartments. They have the capital, know-how and will to do it. All that needs to happen is government and councils get

Why not just let private developers build apartments. They have the capital, know-how and will to do it. All that needs to happen is government and councils getting out of their way with zoning restrictions and the problem will fix itself as if by magic. I agree on the land value tax part of what you said, though.

kiba 5y ago
The problem is not government and councils but all the homeowners who don't want any development. Buying them out incrementally is hopefully a way to remove political opposition.
- fighterpilot 5y ago
  The problem is councils and governments that are controlled by homeowners who vote in NIMBY restrictions. The reason there aren't apartments going up everywhere is that it's literally illegal to do it, not that a developer is finding it difficult to find eight adjacent single detached homes to buy up in one go.
robert_foss 5y ago
There's nothing preventing them from building now, yet they are not. What would incentivize the building of low or medium income housing, when higher profits can be made from high income housing.
- fighterpilot 5y ago
  The BauNVO stipulates restrictions on building height and on floor area relative to land area. Are you sure it's legal to build a 30-storey apartment in a residential zoned area in Berlin without needing to get some special exemption or permit? In the US and many other countries, the reason is definitely local government restrictions. Developers would love to build more high-rise apartments - it's very profitable to them - but they're not allowed to in many areas. In the area I'm living in, it is illegal to do it. The incentive picture is not as you're portraying, and we can look to other industries for counter examples. If there's profit to make, the market will fill those shoes, even if there's "more profit" (which I don't agree is the case always due to volume) serving wealthier customers. Consider the market for low-margin cheap restaurants in poor areas, and the market for high-end dining in rich areas. These are both very well served markets. The market will almost always find profits where they're to be had, especially in an industry like real estate development.
imtringued 5y ago
Baden Würtemberg is introducing a modified land value tax. It's probably the biggest political win of the decade.
gregorygoc 5y ago
Because private developers optimize for their profit, not creating high quality area of living. You can look at what the full fledged free market is doing to largest cities in Warsaw. It’s a shit show.

kiba 5y ago

The problem is not government and councils but all the homeowners who don't want any development. Buying them out incrementally is hopefully a way to remove political opposition.

fighterpilot 5y ago
The problem is councils and governments that are controlled by homeowners who vote in NIMBY restrictions. The reason there aren't apartments going up everywhere is that it's literally illegal to do it, not that a developer is finding it difficult to find eight adjacent single detached homes to buy up in one go.

robert_foss 5y ago

There's nothing preventing them from building now, yet they are not. What would incentivize the building of low or medium income housing, when higher profits can be made from high income housing.

fighterpilot 5y ago
The BauNVO stipulates restrictions on building height and on floor area relative to land area. Are you sure it's legal to build a 30-storey apartment in a residential zoned area in Berlin without needing to get some special exemption or permit? In the US and many other countries, the reason is definitely local government restrictions. Developers would love to build more high-rise apartments - it's very profitable to them - but they're not allowed to in many areas. In the area I'm living in, it is illegal to do it. The incentive picture is not as you're portraying, and we can look to other industries for counter examples. If there's profit to make, the market will fill those shoes, even if there's "more profit" (which I don't agree is the case always due to volume) serving wealthier customers. Consider the market for low-margin cheap restaurants in poor areas, and the market for high-end dining in rich areas. These are both very well served markets. The market will almost always find profits where they're to be had, especially in an industry like real estate development.

imtringued 5y ago

Baden Würtemberg is introducing a modified land value tax. It's probably the biggest political win of the decade.

gregorygoc 5y ago

Because private developers optimize for their profit, not creating high quality area of living. You can look at what the full fledged free market is doing to largest cities in Warsaw. It’s a shit show.