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If youre both managing a property portfolio as well as building on it, free capital gains for no work are a pretty good deal. Sure, if you're a small builder y
by disgruntledphd2 3y ago
If youre both managing a property portfolio as well as building on it, free capital gains for no work are a pretty good deal.
Sure, if you're a small builder you want to build ASAP for cash flow reasons. However over the past decade both the UK and Irish building markets have become dominated by REITs who do in fact benefit from increased land prices in the absence of building.
- robertlagrant 3y agoYes, because of the regulatory and zoning environment. Of course they should do this - in an environment where it's more profitable to do nothing than to build, building companies should do nothing. The problem is the environment they exist in. Fix the environment, and they will build more.
- disgruntledphd2 3y ago> in an environment where it's more profitable to do nothing than to build, building companies should do nothing. I mean, sortof. I get where you're coming from, but if a development has planning permission (i.e. it's allowed to be built) then it should be massively penalised if development doesn't begin pretty soon after this. As a society, it's problematic for a whole bunch of reasons to have companies sit on land that could provide housing when there's a shortage.
- robertlagrant 3y agoYou don't fix government/zoning disincentives to do things with government disincentives to not do things. It's just more time and money wasted on people to inspect and enforce and run appeals systems (what if they had a good reason for not starting?) and write and update rules (what do we count as a good reason?). All of this costs endless tax money that could've been spent on building or buying houses. Or, in 2023, just buying enough food. Fix the underlying issues, and people will build.