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I'm in a very densely populated area, and I'm watching a ton of formerly affordable housing being converted into luxury housing. I've been told that building l

I'm in a very densely populated area, and I'm watching a ton of formerly affordable housing being converted into luxury housing. I've been told that building luxury housing would free up existing housing, but that doesn't seem to be the case. Developers and owners seem to be in a desperate race to convert their non-luxury properties into luxury housing, reducing the stock of affordable housing altogether.

im_down_w_otp 4y ago
There are many different groups of interest in the housing game on all sides. Builders, buyers, sellers, lenders, brokers, securitizers, etc. The central issue at play here is that only one group who comprises a very small portion of overall influence who wants to see housing become more affordable is... first-time home buyers, and even they don't want the price to go down after they've managed to get into their first house. The whole system is setup to incentivize a "pull the ladder up behind you" mentality because the whole system is arranged fundamentally around the idea that a house is a growth investment rather than a utilitarian object. I don't know how we get around this problem.
Seattle3503 4y ago
"Luxury" in housing is a pricepoint, not a level of amenities. In most cases, the prices were going to rise anyways because it is the area is desirable. If building a "luxury" unit would raise property values, Detroit would have had a solution to their woes long ago. The solution to expensive housing isn't to prevent development, but to allow for denser development. When given the choice between low-rise and mid-rise, developers will tend to chose mid-rise, as it allows them more money on the same lot size. More supply can bring down prices. Even renters who can't afford the newer more expensive unit benefit, because the folks who move into the new units must vacate their unit first [1]. [1] https://research.upjohn.org/cgi/viewcontent.cgi?article=1325&context=up_workingpapers https://research.upjohn.org/cgi/viewcontent.cgi?article=1325...
- heavyset_go 4y ago
  Yes, by luxury I mean price points.

im_down_w_otp 4y ago

There are many different groups of interest in the housing game on all sides. Builders, buyers, sellers, lenders, brokers, securitizers, etc. The central issue at play here is that only one group who comprises a very small portion of overall influence who wants to see housing become more affordable is... first-time home buyers, and even they don't want the price to go down after they've managed to get into their first house. The whole system is setup to incentivize a "pull the ladder up behind you" mentality because the whole system is arranged fundamentally around the idea that a house is a growth investment rather than a utilitarian object. I don't know how we get around this problem.

Seattle3503 4y ago

"Luxury" in housing is a pricepoint, not a level of amenities. In most cases, the prices were going to rise anyways because it is the area is desirable. If building a "luxury" unit would raise property values, Detroit would have had a solution to their woes long ago. The solution to expensive housing isn't to prevent development, but to allow for denser development. When given the choice between low-rise and mid-rise, developers will tend to chose mid-rise, as it allows them more money on the same lot size. More supply can bring down prices. Even renters who can't afford the newer more expensive unit benefit, because the folks who move into the new units must vacate their unit first [1]. [1] https://research.upjohn.org/cgi/viewcontent.cgi?article=1325&context=up_workingpapers https://research.upjohn.org/cgi/viewcontent.cgi?article=1325...

heavyset_go 4y ago
Yes, by luxury I mean price points.