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> It's probably better for the city to have overbuilt than under, and attempts to discourage vacancy are likely to discourage new construction. I am in agreeme
by ttymck 3y ago
> It's probably better for the city to have overbuilt than under, and attempts to discourage vacancy are likely to discourage new construction.
I am in agreement with the general points being made in this discussion, but this jumps out at me as completely backwards.
I know commercial real estate != residential, but we've seen lack of discouraging vacancy has NOT led to increased construction. It just leads to rampant speculation and incredible negative externalities (see San Francisco, the subject of this discussion).
I would need to see some evidence that discouraging office vanacy would lead to under-development. Wouldn't discouraging vacancy lead to lower prices ("market-clearing") possibly even inducing demand, in turn encouraging construction?
I don't claim that you speak for economists, or politicians, or even all of the electorate, but I think your arguments are evident of the prevailing understanding and I'm seriously pessimistic about our future as a result. We are going to continue to do the same things and expect better results.
If the "free market" is so great, but we have to hem and haw about how to make sure billionaire developers can extract tax incentives so they can layoff 10% fewer employees in the next downturn, then we are well and truly [word].
- OkayPhysicist 3y agoI think I may have been unclear. In that context, I meant non-specific vacancy discouragement, such as simply jacking up commercial property taxes. The ideal market solution would be something approximating a Georgist-style land tax, trying to tax non-improvement appreciation of property at ~100%, killing the land speculation business. But if you implement that at a city scale, there are other cities in every direction more than happy to let the financiers of new construction become obscenely rich off of that speculation. So your options are A) high level reform, at the state or preferably national level, to eliminate that axis of competition or B) trying to solve the specific ill of deliberate vacancy without murdering your city's competitive edge in attracting business and investment.
- ttymck 3y agoUnderstood, thanks for clarifying. I didn't mean to attack your specific wording. I strongly agree with your mention of "preferably national level" regulation. More and more, across all issues, I see this as our biggest obstacle to progress. A patchwork of state + local policymaking turns everything into a regional feudalist race-to-the-bottom.