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https://archive.ph/1vwiR https://archive.ph/1vwiR This is inaccurate: "The influx of higher-income renters has in part led to a decline in the number of lower-

https://archive.ph/1vwiR https://archive.ph/1vwiR This is inaccurate: "The influx of higher-income renters has in part led to a decline in the number of lower-priced rental properties available in the U.S." Legal restrictions on the number of housing units that can be built led to a decline in the number of lower-priced rental properties available. We've had the technology to build more housing on a given land parcel for more than a century. We should use it!

cratermoon 3y ago
On the other hand, even if you expand the number of housing units allowed for a parcel, if there are just more higher-income renters and they are more profitable renters than low-income, the incentives would favor building higher-priced rental properties. It's market forces at work. In other words, just because a developer is allowed to build denser, the developer will not build lower-priced properties if they can make more money building higher-priced ones.
- matthewdgreen 3y ago
  The new construction doesn’t have to be targeted at low-priced rentals. If higher-income renters move to the new construction this frees up the older apartments for lower-priced rentals. What matters is the increase in supply.
  - cratermoon 3y ago
    Yeah, I've heard that said, but it assumes the older apartments will drop in price. If there's more demand than supply, why would they drop?
    - matthewdgreen 3y ago
      So I read the objection above not as “prices won’t drop if we don’t build enough,” which is perfectly reasonable. But rather as “prices won’t drop if we build enough supply but the new construction is mostly targeted at the high end of the market,” which I think is not true.
  - seanmcdirmid 3y ago
    Those older apartments become prime targets for redevelopment as long as the money from high income tenants keeps rolling in.
seanmcdirmid 3y ago
If only San Francisco was as dense as Hong Kong, they would be as cheap as Hong Kong? I don’t think densification has ever led to cheaper cities, because it has also led to nicer more desirable ones that more people want to live in.

cratermoon 3y ago

On the other hand, even if you expand the number of housing units allowed for a parcel, if there are just more higher-income renters and they are more profitable renters than low-income, the incentives would favor building higher-priced rental properties. It's market forces at work. In other words, just because a developer is allowed to build denser, the developer will not build lower-priced properties if they can make more money building higher-priced ones.

matthewdgreen 3y ago
The new construction doesn’t have to be targeted at low-priced rentals. If higher-income renters move to the new construction this frees up the older apartments for lower-priced rentals. What matters is the increase in supply.
- cratermoon 3y ago
  Yeah, I've heard that said, but it assumes the older apartments will drop in price. If there's more demand than supply, why would they drop?
  - matthewdgreen 3y ago
    So I read the objection above not as “prices won’t drop if we don’t build enough,” which is perfectly reasonable. But rather as “prices won’t drop if we build enough supply but the new construction is mostly targeted at the high end of the market,” which I think is not true.
- seanmcdirmid 3y ago
  Those older apartments become prime targets for redevelopment as long as the money from high income tenants keeps rolling in.

seanmcdirmid 3y ago

If only San Francisco was as dense as Hong Kong, they would be as cheap as Hong Kong? I don’t think densification has ever led to cheaper cities, because it has also led to nicer more desirable ones that more people want to live in.