alt Hacker NewsWith 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.
When 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.