Reply to We need homes. A lot of homes. Not just affordable, but also middle-income homes.

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Reply to "We need homes. A lot of homes. Not just affordable, but also middle-income homes."

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[quote=Anonymous]Residential development is an industry with no barriers to entry. It is incredibly competitive, pro-cyclical, speculative and the returns on capital _over time_ and _in aggregate_ are worse than the stock market. Of course, some developers do incredibly well, and many developers do well over short (5-8 year) time horizons. And of course many go BK when housing markets slow. For example, in the pandemic, in general if rent rolls fell 7%, most developers were not able to cover their carrying costs.

But developing “in fill” (that is, in a city vs the endless exurbs) is unbelievably painful and time consuming. What keeps any profit margin in the industry at all is that most people do not have the stamina and willingness to fight nonstop with all the “stakeholders” who hold a pocket veto on development.

Tokyo is the model we should be following (easier said than done, since Tokyo just keeps expanding out further and further). We should make it easy to build more housing. Clearly there is enough demand to absorb 2x the housing the city currently has.

The path to “affordable” housing is to build more housing full stop. When my family moved to DC 60 years ago for mid-level govt work, they could afford to live just about anywhere in the city and close in suburbs… b/c the population was quite small, and (mostly the suburbs) had built out a lot of housing in proportion to the population.

In those 55 years, the population has exploded but the close-in housing stock has not nearly kept pace.

Hear hear to the first post on this thread: build more housing! Make it easy to do so![/quote]

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