3 ms·
Here are the facts that inform my opinion: 1. The market can not produce below-market-rate-housing. 2. The size of the construction loan correlates to the mar
by brudgers 2y ago
Here are the facts that inform my opinion:
1. The market can not produce below-market-rate-housing.
2. The size of the construction loan correlates to the market segment of a development project. Building 80 high end dwellings requires a larger loan than building 80 low end dwellings. Banks like to make big loans. 10% of a lot of money is more money than 10% of a little money.
3. The amount of effort does not correlate to the market segment of a development project. Entitlement of 80 high end dwellings is much easier than entitlement of 80 low end dwellings because jurisdictions get more benefits from rich residents than from poor residents.
4. Scarcity of good affordable housing is the historical mean.
5. Real-estate is where wealth is parked, not where wealth is generated. If you have a billion dollars, your problem is keeping it not growing it.
6. Housing is the lowest and worst use of real-estate in the hierarchy of development because its economic value is not tied to the economic productivity of its use.
Good luck.
- Jeremy1026 2y ago> 5. Real-estate is where wealth is parked, not where wealth is generated. If you have a billion dollars, your problem is keeping it not growing it. I disagree with this one. That billion dollars may be parked in real estate, but when you're ready to liquidate it you're (statistically speaking) more than likely to be pulling out more than the billion you put in.
- brudgers 2y agoIf you liquidate a billion dollars you have a problem. Where do you park a billion dollars? If you need to liquidate a billion dollars, it is not wealth.
- Jeremy1026 2y agoIf you are simply looking to put it somewhere, likely government bonds. Hedge yourself against inflation and call it a day.
- brudgers 2y agoBonds mature. In a few years you have to figure out where to park the billions. Land persists. In a hundred years the land will still be there growing grapes or grazing cattle. If you are hedging inflation, it’s not wealth. Don’t misunderstand me, I get where you are coming from. It is not the world of wealth. On the timeline of civilization capitalism is a recent innovation. Wealth is as old as civilization. Thinking about wealth with capitalist assumptions obscures wealth’s mechanisms.
- Jeremy1026 2y agoYou park them back into more bonds, more accurately, your "money guy" buys more bonds with them. Once you're into _illions on hand, you no longer have a direct hand on your money.
- brudgers 2y agoI doubt the Windsors do bonds. But I could be wrong.