alt Hacker NewsDevelopers not recouping their investment will discourage less housing in Austin in the future and it will become expensive again. A lot of our current housing shortages are from the build up in 2008 and an implosion of the entire industry (so that crafts people did not really exist for the next need for housing).
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They can recoup the investment with volume (especially apartments) I would think? Sell 10 houses at 2 million each or 30 at 1 million each or however it breaks down.
So, do we just need to nationalize housing construction? If the free market apparently just can't handle it?
What evidence is there that developers won't break even or profit? The demand is clearly there, it's a seller's market.
just because rents fell doesn't mean developers couldn't recoup their investment. 2008 was completely different.
It's a balancing act. Build too much and developers make less money. Build too little and poverty and homelessness shoot up. Which side do you want to err on?
> Developers not recouping their investment
Last time I did the back-of-the-envelope math, financing permitting delays in San Francisco added 10% to the cost of new housing [1]. (Note: not the cost of permitting. Just the cost of financing the delay.)
This is deadweight loss that everyone in the transaction wins from eliminating. One could absolutely see lower prices and higher developer margins if this waste were cut.
[1] https://news.ycombinator.com/item?id=38664780