alt Hacker NewsAsking why they don't build affordable housing is like asking why don't they build used cars
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The project to build
https://www.libraryplaceithaca.com/
was almost a decade late, like a nuclear reactor, and they realized only after it was built that there is no market in our town for "luxury senior housing" because seniors with money go to Florida or Arizona. If they could fill the places you might say that it's better business to build expensive rather than cheap apartments but when these places are vacant you start to wonder if they are farming tax writeoffs or something
https://www.youtube.com/watch?v=9wfblqh9icQ
What you expect first is they are going to tell the local town they can't pay the property taxes, in a few years they'll tell the bank they can't afford the loans they took out to build it.
Other "luxury apartment" projects outside of Collegetown usually have some segment of subsidized "affordable" units, one of these has at least two police calls to it a day and in the last few weeks these have included murder and arson.
Exactly -- all new housing is going to be marketed as "luxury".
Who is going to build a brand-new apartment and say "well, this is janky low-quality housing, you might want to live here if you're poor or something"?
Exactly
Plus housing you are mostly paying for the land. The land is expensive because it is finite and because zoning constrains how much housing you can build on it.
In many places the land is 2/3 the cost of the housing. The cost difference in building what left nimbys deride luxury and what would be considered affordable is really marginal. It’s like $100k in finishes in a $1.5M condo type difference.
r/cars swears up and down that they'd buy a brown manual wagon pre-used from the factory!
Because most people are out here driving used Ferraris and Koenigseggs and living in old mansions?
Your argument falls apart when you realize they manufacture and sell explicitly affordable cars. It's nearly half the market.
The problem is that you don't generally destroy the used car in order to build a new one. So increasing the new cars on the road eventually also increases the number of used cars on the road.
Except that outside of Japan, it is unusual for detached homes to depreciate in value. Apartments though you do have a point. Unless the location adds the value they will depreciate over time.
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No… it’s like asking why they don’t build cheap cars. Which they do.
This is a perfectly succinct way to put it.
New housing is simply more expensive; so it's marketed as "luxury", and it's sold at a premium to the higher end of the housing market. This reduces demand for the older, more affordable existing housing stock, and with depreciation and wear and tear, the new housing will become more affordable as time goes on.
If you're in a market with a shortage of housing, those with more money will simply outbid those with less, even for older, less desirable housing. I've seen it, where when I moved out of my last apartment before I bought a house, my landlady raised rent considerably when looking for a new tenant, and even then she got a tenant who wanted to pay her over the rate that she was asking for to ensure that they were able to get the apartment over all of the other applicants. Wealthy empty-nesters who were downsizing, and willing to pay a premium for an older apartment in a desirable neighborhood, forcing out anyone who might have otherwise been able to afford it.
So yes, while it does help for there to be some push to build more affordable housing, if taken to an extreme building only luxury housing will leave an unbalanced market, in a lot of cases building luxury housing is exactly what you want to do to reduce the competition for the existing, more affordable housing stock.