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The wealthy people demanding luxury housing are the ones driving housing prices up. They’re going to buy a house no matter what - would you rather they “overpay

by avalys 4y ago

The wealthy people demanding luxury housing are the ones driving housing prices up. They’re going to buy a house no matter what - would you rather they “overpay” for an existing house in an established neighborhood and drive gentrification, or move into new construction? If you meet their demand with new housing, the demand and price pressure on existing housing inventory will decrease, even if you don’t build any new “affordable” housing.

1letterunixname 4y ago
The Bay Area is a perfect example. NIMBYs don't want new construction of anything. They might look the other way if it were luxury construction away from them, but cannot have affordable homes anywhere. The rich from all over the world will continue to be attracted to the area, compete with less well-off people already there who are priced out of the market. This is why there are so many homeless and people living vehicles who cannot afford housing. I make $300k but cannot afford to buy my grandparents' home that is $2.5M now but was $30k in 1968 ($260k in today's money, an order-of-magnitude increase in price. $50k is the average income today but it was $74.5k ($8.6k) in today's money then. That's 3.5x housing/income to 50x.).
derefr 4y ago
> would you rather they “overpay” for an existing house in an established neighborhood and drive gentrification, or move into new construction? How are those the two options? Aren't you forgetting about new construction in established neighbourhoods? I.e. buying up two or three low-density lots, or a older/decrepit low-land-value condo building, to replace these lot(s) with a modern, high-density mixed-use condo building, composed mostly of high-sqft condos that cost more than most SFHs? There are more units on the new lot than there were on the old lot(s), so the people buying these units are definitely "moving into new construction"; but at the same time, the creation of these units displaced previous low-cost rentals. This is 99% of what people in my city (Vancouver) are complaining about when they talk about gentrification through "luxury construction": being priced out of a neighbourhood they previously rented in, as buildings containing low-price rental units are torn down and replaced by buildings containing only high-price rental units.
patrakov 4y ago
I didn't demand luxury housing! In fact, I was planning to buy something 3x cheaper, but a "nice" sales girl has convinced me that the alternative that I was considering is not good enough - "that's just an apartment in a 20-story house, and look what's around there, no school, no Italian restaurant (and I know you like Italian food), no nothing, and we have it all here, and also this nice shadowed alley".

by avalys 4y ago

1letterunixname 4y ago

The Bay Area is a perfect example. NIMBYs don't want new construction of anything. They might look the other way if it were luxury construction away from them, but cannot have affordable homes anywhere. The rich from all over the world will continue to be attracted to the area, compete with less well-off people already there who are priced out of the market. This is why there are so many homeless and people living vehicles who cannot afford housing. I make $300k but cannot afford to buy my grandparents' home that is $2.5M now but was $30k in 1968 ($260k in today's money, an order-of-magnitude increase in price. $50k is the average income today but it was $74.5k ($8.6k) in today's money then. That's 3.5x housing/income to 50x.).

derefr 4y ago

> would you rather they “overpay” for an existing house in an established neighborhood and drive gentrification, or move into new construction? How are those the two options? Aren't you forgetting about new construction in established neighbourhoods? I.e. buying up two or three low-density lots, or a older/decrepit low-land-value condo building, to replace these lot(s) with a modern, high-density mixed-use condo building, composed mostly of high-sqft condos that cost more than most SFHs? There are more units on the new lot than there were on the old lot(s), so the people buying these units are definitely "moving into new construction"; but at the same time, the creation of these units displaced previous low-cost rentals. This is 99% of what people in my city (Vancouver) are complaining about when they talk about gentrification through "luxury construction": being priced out of a neighbourhood they previously rented in, as buildings containing low-price rental units are torn down and replaced by buildings containing only high-price rental units.

patrakov 4y ago

I didn't demand luxury housing! In fact, I was planning to buy something 3x cheaper, but a "nice" sales girl has convinced me that the alternative that I was considering is not good enough - "that's just an apartment in a 20-story house, and look what's around there, no school, no Italian restaurant (and I know you like Italian food), no nothing, and we have it all here, and also this nice shadowed alley".