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> Upzoning doesn't guarantee increased development as developers only build when it makes financial sense to do so, and flooding the market with more units woul
by astrange 3y ago
> Upzoning doesn't guarantee increased development as developers only build when it makes financial sense to do so, and flooding the market with more units would decrease the potential profit they can make.
This doesn't really matter; developers aren't a cartel and they don't care if the margin on new projects goes down. They only have to care that the smaller margin goes to them and not someone else.
(To the extent they are a cartel, it's because they got one enforced by downzoning, because only legal force can keep people in the cartel.)
- BirdieNZ 3y agoDevelopers aren't a cartel, but they respond to incentives just like anyone else. https://www.fresheconomicthinking.com/p/upzoning-predictions-versus-reality https://www.fresheconomicthinking.com/p/upzoning-predictions... For one example of how upzoning alone doesn't result in developers exceeding the market saturation rate. To be clear, I support upzoning but I think it should be accompanied with an increase in the holding cost of land, so landowners are incentivised to develop now rather than later.
- astrange 3y agoThat can be assisted with countercyclical housing policy, like subsidizing construction or a public housing developer. The US does tons of this on the demand side already, but of course if you limit supply too hard that just makes everything infinitely expensive.