4 ms·

> If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable. Not really: Say there's one free acre

by jjav 5y ago

> If developers build more luxury housing, that'll reduce the price of existing housing, such that it becomes affordable. Not really: Say there's one free acre of land in town. You could build one mansion on it, or a highrise with 100 apartments. Building the mansion isn't going to move the needle on any existing housing at all, as it's just one unit.

paxys 5y ago
That isn't a matter of incentives but zoning laws.
nine_k 5y ago
I wonder why NYC has so few mansions, and so many high-rises.
- undersuit 5y ago
  The high rises in NYC are mansions.
  - nine_k 5y ago
    Occupied by one extended family?
frenchy 5y ago
As long as land prices are high, a highrise should net a lot more profit though, would it not?
alistairSH 5y ago
Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law. Locally, when I see people complain about luxury housing being built, it's because the developer is building high-spec townhomes and selling them for $800k+. Instead of lower-spec townhomes at $500k. The developer can't fit appreciably more homes in the same footprint (they're all 3-4 stories tall here - reducing size likely means one fewer stories). And the market will bear $800k+, so that's what we get. The real answer is build even more homes. Or allow high-rises on the same lots. In theory, the family that buys the $800k townhome came from somewhere. The smaller house they vacated is now open for somebody else (who in turn moved out of a studio flat that's now open, and on down).
- jachee 5y ago
  > The smaller house they vacated is now open for somebody else Or, they didn’t sell it and are just seeking rent on it, now. For this effect to really work, the number of home-owners should equal the number of homes. Right now, there are many, many fewer home-owners than homes.
  - jjav 5y ago
    > Or, they didn’t sell it and are just seeking rent on it, now. That's fine, it still provides housing for someone. And there are people who actually prefer to rent, so it's good to have rental units available. Problematic is when they hold on to it and keep it empty, thus occupying space but providing housing for no one.
  - seoaeu 5y ago
    No, the number of homes has to be slighter higher than the number of residents. If a renter is living in a home then it isn’t going to waste! (Slightly higher because it is mathematically impossible for anyone to move if there are no empty homes, and they sometimes have to sit vacant while being renovated or are in the process of being sold)
- jjav 5y ago
  > Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law. A developer will, indeed. More profit. But an acre is small enough that it could just as well be a rich individual buyer, in which case they'll build what they like. There's a half-acre plot for sale nearby for nearly $2M, I'm curious if it ends up being bought by an IPO millionaire to build a small mansion or by some developer to put up two-story apartments. Could go either way.
  - bombcar 5y ago
    In many markets there’s no choice - it has to be a single family home.
  - icambron 5y ago
RangerScience 5y ago
Are there any places that have these kinds of housing pressure where there are a significant number of free acres of land in town? (I say this sitting in the middle of the LA metropolis between two almost undeveloped hillsides of ~10 acres each, haha; and a thousand more people in this neighborhood would be significant for us (maybe? dunno the actual pop count) but nothing to LA as a whole, AFAIK)

by jjav 5y ago

paxys 5y ago

That isn't a matter of incentives but zoning laws.

nine_k 5y ago

I wonder why NYC has so few mansions, and so many high-rises.

undersuit 5y ago
The high rises in NYC are mansions.
- nine_k 5y ago
  Occupied by one extended family?

frenchy 5y ago

As long as land prices are high, a highrise should net a lot more profit though, would it not?

alistairSH 5y ago

Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law. Locally, when I see people complain about luxury housing being built, it's because the developer is building high-spec townhomes and selling them for $800k+. Instead of lower-spec townhomes at $500k. The developer can't fit appreciably more homes in the same footprint (they're all 3-4 stories tall here - reducing size likely means one fewer stories). And the market will bear $800k+, so that's what we get. The real answer is build even more homes. Or allow high-rises on the same lots. In theory, the family that buys the $800k townhome came from somewhere. The smaller house they vacated is now open for somebody else (who in turn moved out of a studio flat that's now open, and on down).

jachee 5y ago
> The smaller house they vacated is now open for somebody else Or, they didn’t sell it and are just seeking rent on it, now. For this effect to really work, the number of home-owners should equal the number of homes. Right now, there are many, many fewer home-owners than homes.
- jjav 5y ago
  > Or, they didn’t sell it and are just seeking rent on it, now. That's fine, it still provides housing for someone. And there are people who actually prefer to rent, so it's good to have rental units available. Problematic is when they hold on to it and keep it empty, thus occupying space but providing housing for no one.
- seoaeu 5y ago
  No, the number of homes has to be slighter higher than the number of residents. If a renter is living in a home then it isn’t going to waste! (Slightly higher because it is mathematically impossible for anyone to move if there are no empty homes, and they sometimes have to sit vacant while being renovated or are in the process of being sold)
jjav 5y ago
> Except, in a competitive/expensive market, the developer will pick the high-rise (almost) every time when allowed by law. A developer will, indeed. More profit. But an acre is small enough that it could just as well be a rich individual buyer, in which case they'll build what they like. There's a half-acre plot for sale nearby for nearly $2M, I'm curious if it ends up being bought by an IPO millionaire to build a small mansion or by some developer to put up two-story apartments. Could go either way.
- bombcar 5y ago
  In many markets there’s no choice - it has to be a single family home.
- icambron 5y ago

RangerScience 5y ago

Are there any places that have these kinds of housing pressure where there are a significant number of free acres of land in town? (I say this sitting in the middle of the LA metropolis between two almost undeveloped hillsides of ~10 acres each, haha; and a thousand more people in this neighborhood would be significant for us (maybe? dunno the actual pop count) but nothing to LA as a whole, AFAIK)