Reply to What's the deal with Developers?

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[quote=Anonymous][quote=Anonymous]Explain to me why developers are bad. I see this take so much whether it's in DC with the Mayor, Montgomery County or any other place. What is it about the developers that makes them awful people?[/quote]

They’re not bad. They’re essential to economic growth. But like any other essential business, they need to be regulated and properly incentivized (or disincentivized). Developers’ lobbyists would like everyone to think that their interests are well aligned with the public interest. But that’s frequently not the case. For example:

1. The public would benefit from plentiful housing bordering on oversupply. Developers benefit from tight markets bordering on shortage. For all the talk of zoning (which we should abolish almost in its entirety), developers don’t use the capacity that’s available now because their business incentives all are stacked toward creating shortages.

2. The public would benefit from a tax system that allocated the costs of development to those who profit from it, with tax-supported infrastructure delivered just as new units come online. Developers want to shift infrastructure costs to the right of occupancy so they extract more of the money that the customer pays as profit for themselves.

3. The public would benefit from truly transit oriented development but developers continue building parking spaces (more than the minimum required) because parking spaces generate a high ROI while the costs (climate, roads, etc) are spread across the community.

As for the complaint above about luxury housing, no one should expect developers to sell for less than market rate. And they wouldn’t if the likes of GGW, Montgomery Planning, and CSG weren’t running around promising that new housing would be affordable. For anyone who says “filtering,” it can work in theory but hasn’t worked in our market because developers don’t build enough. I’ve never understood why people think developers would intentionally drive down the price of their own product over a sustained period of time. How would they stay in business?[/quote]

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