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> With housing you also have a better chance of outpacing demand growth if you build densely enough. I feel like one important driver of demand is missing here
by Tade0 4y ago
> With housing you also have a better chance of outpacing demand growth if you build densely enough.
I feel like one important driver of demand is missing here: investment properties.
It's no secret that at one moment AirBnB essentially took over tourist hotspots in the most attractive cities, jacking prices up to ridiculous levels.
There's a building in my neighborhood that consists of so-called "microapartments" - 18-25m2 units, which on the lower end, from a legal standpoint, wouldn't even be considered housing today.
Of course half of them are empty because they weren't really meant to be occupied in the first place.
This sort of demand is essentially boundless because while even a billionaire can only drive one car at a time, they can easily own thousands of investment properties and not even bother to rent them out if the market is hot enough.
Of course regulations follow, but shitty housing built with investors in mind doesn't just disappear overnight.
- renewiltord 4y agoThe logical thing for any locality is then to build one million units and sell them for a million dollars each. Since the supply elasticity of price is zero in this model, the locality can amass a trillion dollars easily. At this point, armed with the resources of nations, it can do many things - perhaps buy out an entire island nation, perhaps end wars. If the money is insufficient, sell a billion homes, and now you have a quadrillion dollars. With that kind of money, this locality could simply acquire entire other nations and transform them into papercli- I mean investment properties. This Von Neumann probe city state will soon encompass the known galaxy.
- Tade0 4y agoThat's a nice vision, but still less absurd than some of the actual listings I've seen, like "Sale! 10 studio apartments!" - you have to buy the whole thing. I'm in the market for an apartment and some of the best spots are already taken by such housing, while families are pushed to the suburbs.