The point is that no matter how much housing you reserve to be "affordable housing", it will still be scarce and thus unaffordable to most. And this kind of well-intentioned red tape often ends up shrinking the supply of housing as a whole, which only makes it even less affordable.
But where is the line? Rampant development can completely alter the feel and culture of a neighborhood and city. It can take away from those things the existing residents enjoy. Sure more supply can accommodate more humans but they won’t necessarily be the same humans if current residents leave, and it won’t necessarily be the same place afterwards. Desirability (demand) creates scarcity but scarcity can also be desirable in itself for some things. At some threshold, the answer isn’t build more but locate people elsewhere and build a more distributed economy rather than a few concentrated powerful cities or states.
If "affordable housing" means "under market price", in practice AH means that it goes to the connected at that price. If they can, they resell at market later, if they can't, well, they just got subsidized housing.
Remember, housing prices in high-priced areas are driven by location, location, location, location, location (yes, two more locations than ordinary housing), so "it's small" doesn't translate to "the market price is low." (It's just less expensive than big.)
When the "market price" exceeds the cash price, the folks who get to buy are the ones who have some way to pay outside the system.
Some countries have what's called "buyer-funded development". Property buyers invest into shares of the development company which then uses the funds to buy land and build housing.
Investors get much cheaper prices, developers get easy liquidity. The downside is that you have to wait a year or two before moving in, and some theoretical risk. (Which can be managed with proper legislation.)
But the scheme works if you want affordable housing.
zozbot234|4 years ago
lprubin|4 years ago
throwawaysea|4 years ago
anamax|4 years ago
Remember, housing prices in high-priced areas are driven by location, location, location, location, location (yes, two more locations than ordinary housing), so "it's small" doesn't translate to "the market price is low." (It's just less expensive than big.)
When the "market price" exceeds the cash price, the folks who get to buy are the ones who have some way to pay outside the system.
otabdeveloper4|4 years ago
Investors get much cheaper prices, developers get easy liquidity. The downside is that you have to wait a year or two before moving in, and some theoretical risk. (Which can be managed with proper legislation.)
But the scheme works if you want affordable housing.