Quote:
Originally Posted by WarrenC12
Developers will never, never build "affordable" housing unless they are required or provided incentives to do so by government, which is the case in many re-zoning applications today. Even then, those incentives have to be more worthwhile as compared to alternative opportunities available to them. That's why Vancouver can extract these requirements, along with CACs and public art, and still have developers interested. Surrey can't hope for anything similar.
They will always seek to maximize profits in the market. They are not constrained by any type of supply, they are constrained by their own size and financial risk levels. If they had Apple levels of corporate financing, Bosa would be redeveloping every piece of available land in Vancouver.
Furthermore your car analogy is terrible because the car market is an entirely different animal. Sparks and Micras are produced because of CAFE standards in the US. Ask any new car dealer, they make a pittance on those cars in terms of profit margin, if anything at all. Only economies of scale allow their production at all, something not possible in real estate development. They are there to get people into a dealership, or possibly into a car they can be upgraded from in the years to come. Those cars are also made of significantly cheaper parts than a Ferrari, with far less labour. Parts and labour are the main inputs to cars, whereas land and time (debt financing interest) are huge inputs to real estate development.
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A response like this shows that you do not even make a good faith effort to read--let alone
comprehend--the posts you respond to.
So, I am not going to really respond to your latest post beyond adding the following:
You are right. Developers will never produce an abundant supply of affordable housing unless they have an incentive to do so. That is exactly what I have been arguing all along. But what you think constitutes an "incentive" is precisely what will ensure that no affordable market housing will ever get built in Vancouver. If you made a good effort to read my post, then you would grasp that the kinds of "incentive" you advocate is precisely what
increases market housing prices, not lowers them.
Lastly, the role that liberal densification plays in the housing industry is very similar to the role that "economies of scale" play in the car industry. Just as economies of scale make the mass production of affordable cars for the middle class a much bigger business than the limited production of luxury vehicles for the affluent, so liberal densification is what would make the construction of affordable market housing for the average person a much bigger business than the construction of luxury housing for the wealthy few.
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