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You have the causality wrong. - Builders build because if high demand. - Landlords raise rent because of high demand. - High demand is based on the localitie
by anonuser123456 5y ago
You have the causality wrong.
- Builders build because if high demand.
- Landlords raise rent because of high demand.
- High demand is based on the localities productivity. Places that are in high demand have lots of jobs that pay high wages.
The only way to relieve the pressure is to build faster than existing demand or to lower the productivity of the region.
- colechristensen 5y agoYes that’s the econ 101 explanation but what seems to have actually happened is the existing demand wasn’t driving up prices in a neighborhood of old brownstones and some rental houses until after new large apartment complexes went up and the new places charged considerably higher rent than the existing supply. This is something I heard first hand more than once from small landlords saying they were increasing prices because the large buildings nearby were also expensive. I.e. it wasn’t demand but normalizing higher prices that people willing to pay high prices. What I am asking for is actual demonstrated evidence of changing policies leading to changing housing supply leading to lower prices.
- tcmart14 5y agoIt depends how deep in the weeds we want to get. I remember when first moving to Oregon, a news station played an interview with a contractor building apartments in Portland. The TLDR of that interview was, we could build affordable housing. However, if the investors in the complex spend a few extra hundred bucks on materials (think granite counter tops), they can append 'luxury' to the word 'apartment' and easily ask a couple hundred more a month. Resulting in a better investment.
- imtringued 5y agoNew construction is more expensive because it's new. It won't be new forever.