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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 profitabl
by 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 agoThe 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 agoYeah, 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 agoSo 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 agoThose older apartments become prime targets for redevelopment as long as the money from high income tenants keeps rolling in.