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With cars you can build a high margin luxury and a low margin affordable model if there are two buyers and collect profit from both. With an apartment if there
by pydry 1y ago
With cars you can build a high margin luxury and a low margin affordable model if there are two buyers and collect profit from both.
With an apartment if there's one plot available, you build the high margin apartment.
Land constraints matter.
A 100% land value tax would help solve this problem and would make buying apartments more like buying a car.
- tptacek 1y agoWhen you build the high-margin apartment, people vacate other housing units to move into it, reducing demand on the older units, which reduces prices in the area. This is just the law of supply and demand, but you don't have to derive it axiomatically: it's empirically what happens when we increase supply at market rates. I'd like a land value tax too, but it's not going to happen, and an LVT would guarantee market-rate development.
- pydry 1y agoYour argument here is simply "rich people dont take second homes". I think it's rather obvious that they do.
- tptacek 1y agoThe number of rich people buying random unoccupied apartments in new multifamily developments has measure zero in the greater scheme of North American housing policy. Meanwhile: the construction of still more housing works against the interests of anyone who would buy a random apartment and hold it vacant as an investment interest, so this is a doubly facile point.