The “law” of supply-and-demand does not apply to housing markets for a simple reason. Investors prefer the profits produced by expensive housing over the financial losses guaranteed when they build low-priced housing. Q & A on CA State Senate Bills 9 & 10https://citywatchla.com/index.php/cw/los-angeles/22286-rolling-out-the-red-carpet-for-real-estate-investors-q-a-on-ca-state-senate-bills-9-10 …
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There are kernels of truth in here, but yeah, this is part of the anti-market solutions mental gymnastics that reject any actual effective change in zoning, urban policy.
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Property owners (both owner-occupied and rental) prefer that housing is kept rare, expensive, and exclusive, because that keeps their assets and incomes up. This is the real dirty secret of why SF home owners oppose zoning reform, they are counting on insane appreciation.
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I'm reading it as "No one builds affordable housing in CA because they can make 10x more expensive homes on the same lot"
Thanks. Twitter will use this to make your timeline better. UndoUndo
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Assuming for the moment that there is high demand at all levels of income, wouldn't investors choose what returns the most profit? Assuming whatever they build will sell quickly. In California, I think this is somewhat true for the suburban areas and key cities?
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At the moment sure, but the number of developers is not fixed, and if there is profit to be made at the low end there will be development. Also, richer people move out of a place when they move into a new one, increasing the stock of more affordable housing.
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