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Great analysis, I totally agree. I would add (for those unfamiliar with financing costs or approval timelines) that two of the major assumptions are conservati
by ahmeneeroe-v2 2y ago
Great analysis, I totally agree.
I would add (for those unfamiliar with financing costs or approval timelines) that two of the major assumptions are conservative to the point of being unrealistic. Cost of money is likely closer to 10-12% and a two-year timeline for approval is very rosy and also doesn't include construction/leasing timelines.
These are real costs that developers have to bear, not just paper costs.
- JumpCrisscross 2y ago> two of the major assumptions are conservative to the point of being unrealistic Yup. Take those to 4 years and 10% (still very optimistic) and you’re adding a quarter of a million dollars in financing costs to get through paperwork alone. That’s the policy-enforced floor to the cost of a New York City apartment. Before any design, materials, construction, further permitting, inspection, sale/leasing and/or maintenance reserve costs. Finance that with an optimistic mortgage, add on property tax, and you get the policy-enforced minimum market rent.