Subsidising rent (landlords will raise rents to compensate for subsidy)
Rent caps and rent control (artificial price ceiling creates shortfall in market, leaving people still without adequate housing or on long waiting lists, or landlords will find bullshit reasons to evict tenants and raise rents)
The problem with point 4 is that no developers are going to undertake it unless they can make a significant profit. If the addition of new housing has the potential to lower the ROI where is the insentive to build?
If the government decides that they will be the developer/investor then the whole project is definitely going to lose money because contractors will ALWAYS milk a government project.
The problem with point 4 is that no developers are going to undertake it unless they can make a significant profit. If the addition of new housing has the potential to lower the ROI where is the insentive to build?
Your assumption is that all builders have infinite flexibility and are exactly the same. The real world companies can’t just adjust their staffing and capital equipment based on last hour revenue. There is always someone will to cut into their margins to get a contract.
Imagine you are running one of those companies. You normally make 100k on this type of job, the market is willing to pay 90k. Do you walk or not? If you walk you still have to make payroll this week. Wouldn’t it be better to not make as much money as you want but still make money vs not making any money?
Capitalism is a far far from perfect system, but it really exceeds at racing to the bottom. Someone somewhere is willing to do x for less.
The race to the bottom will work great in underregulated labor markets or anywhere regulations on environmental and safety standards are relaxed. The issue (no problem, because I believe there should be tough regulation) is that there is now a baseline that you can’t really go under unless you cut corners somehow.
I’ve been working in construction in the SF Bay Area for over 15 years.
Right so you can’t think of literally anyway you can follow the rules and make more money? I find that surprising given that I have listed one method in my previous comment and my infrastructure employer is constantly finding tricks to bring the costs down
Sure they are.
What doesn’t work (but inevitably will be tried):
What does work:
The problem with point 4 is that no developers are going to undertake it unless they can make a significant profit. If the addition of new housing has the potential to lower the ROI where is the insentive to build?
If the government decides that they will be the developer/investor then the whole project is definitely going to lose money because contractors will ALWAYS milk a government project.
Public housing is not about profit. It’s about giving people affordable shelter.
Your assumption is that all builders have infinite flexibility and are exactly the same. The real world companies can’t just adjust their staffing and capital equipment based on last hour revenue. There is always someone will to cut into their margins to get a contract.
Imagine you are running one of those companies. You normally make 100k on this type of job, the market is willing to pay 90k. Do you walk or not? If you walk you still have to make payroll this week. Wouldn’t it be better to not make as much money as you want but still make money vs not making any money?
Capitalism is a far far from perfect system, but it really exceeds at racing to the bottom. Someone somewhere is willing to do x for less.
The race to the bottom will work great in underregulated labor markets or anywhere regulations on environmental and safety standards are relaxed. The issue (no problem, because I believe there should be tough regulation) is that there is now a baseline that you can’t really go under unless you cut corners somehow.
I’ve been working in construction in the SF Bay Area for over 15 years.
Right so you can’t think of literally anyway you can follow the rules and make more money? I find that surprising given that I have listed one method in my previous comment and my infrastructure employer is constantly finding tricks to bring the costs down
Can’t have landlords taking a haircut on rent.
Who did you think they where helping?