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Old 11-30-2010, 11:02 AM
 
9 posts, read 13,751 times
Reputation: 17

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I don't understand how new development (and I'm not talking about low income apts) replacing surface parking/dumpy buildings is going to bring down someone's property value...?
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Old 11-30-2010, 11:18 AM
 
3,207 posts, read 4,508,061 times
Reputation: 1732
Just popping in to say that government policies designed to keep property prices high are pretty objectively awful, especially for poor people, and it's a disgrace that we've put ourselves in a position where these interests get to have a reasonable say in how neighboring properties are developed.

Here's a decent but aging piece by Ivy League economists about the problem. It's on the lol CATO institute's website, I know, but they are academics their point still rings true. They basically find that in many cities, housing prices are far, far higher than can be explained by land value + structure costs. If anyone objects to this being bad, then we can have that discussion, but I think it should be pretty much self evident.

Here's an excerpt:

Quote:
The bulk of the evidence that we have marshaled suggests
that zoning and other land-use controls are more responsible
for high prices where we see them. There is a huge gap
between the price of land implied by the difference between
home prices and construction costs and the price of land
implied by the price differences between homes on 10,000
square feet and homes on 15,000 square feet. Measures of
zoning strictness are highly correlated with high prices.
While all of our evidence is suggestive, not definitive, it seems
to suggest that land-use regulation is responsible for high
housing costs where they exist.

If policy advocates are interested in reducing housing costs, they
would do well to start with zoning reform. Building small numbers
of subsidized housing units is likely to have a trivial impact
on average housing prices (given any reasonable demand elasticity),
even if well-targeted toward deserving poor households. However,
reducing the implied zoning tax on new construction could
well have a massive impact on housing prices.
Fortunately, Atlanta is on the lower end of the scale. It's apparently far cheaper to build an identical house here once you own a plot of land than it is in other cities. Or at least that was the case in 2002.

If you're interested, here's an article from early 2010 where the lead economist of that study argues that a big part of Atlanta's success going forward is going to be the ease of construction (among other things, like a skilled workforce).

Last edited by testa50; 11-30-2010 at 11:28 AM..
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Old 11-30-2010, 11:54 AM
 
152 posts, read 237,782 times
Reputation: 140
Quote:
Originally Posted by particle View Post
I don't understand how new development (and I'm not talking about low income apts) replacing surface parking/dumpy buildings is going to bring down someone's property value...?

Err given a choice between buying a house right next to a condo development (existing or brand new) vs one down the street that isn't which would you buy ? For example I looked at a house in Inman Park - nice one in fact but the backyard was overlooked by a common deck for the attached condominiums. At night the party scene was quite active. In acknowledgment of this the owner listed at about 50K less than a comparable house down the street. Actually the house down the street wasn't as nice but it still sold for more than the property near the condos.
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Old 11-30-2010, 12:03 PM
 
9 posts, read 13,751 times
Reputation: 17
Quote:
Originally Posted by Somoso View Post
Err given a choice between buying a house right next to a condo development (existing or brand new) vs one down the street that isn't which would you buy ? For example I looked at a house in Inman Park - nice one in fact but the backyard was overlooked by a common deck for the attached condominiums. At night the party scene was quite active. In acknowledgment of this the owner listed at about 50K less than a comparable house down the street. Actually the house down the street wasn't as nice but it still sold for more than the property near the condos.
Ok I'll give you that. But if you own a house that's next to a major street in a desirable area with parking lots/obsolete buildings, your house is going to be less desirable the one down the prettier street regardless. You're telling me that improving the lot is going to significantly bring down your value?
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Old 11-30-2010, 12:10 PM
 
Location: GA-TX
442 posts, read 678,767 times
Reputation: 202
How does access to rail drop a property value? I'd pay more to live next to a rail transit station for the convience.

Last edited by sk8t; 11-30-2010 at 01:11 PM..
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Old 11-30-2010, 12:22 PM
 
8,862 posts, read 14,388,045 times
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Quote:
Originally Posted by sk8t View Post
How does access to rail drop a property value? I'd pay more to live next to a rail transit station fir the convience.
You might find some answers in this thread---posts #2 and 5 and several others.

Vision for US 78/Scott Blvd/Ponce
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Old 11-30-2010, 12:37 PM
 
152 posts, read 237,782 times
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Quote:
Originally Posted by particle View Post
Ok I'll give you that. But if you own a house that's next to a major street in a desirable area with parking lots/obsolete buildings, your house is going to be less desirable the one down the prettier street regardless. You're telling me that improving the lot is going to significantly bring down your value?
Yes but why is that a surprise ? Again most people would not want to live next to an apartment/condo (new or otherwise) if they could just as easily live in a comparable house down the street with houses on either side. This is why sellers might choose to discount their asking price to attract buyers. It happens all the time and even before the bubble. Some people don't care but most do.

I once rented a house near a new apartment complex and the noise was unrelenting but I could deal with it since I knew it was temporary. It is particularly telling that the landlord was renting the home because he couldn't find a buyer to pay his asking price with the most common reason being that it was "too close to the apartments". Similarly some buyers would not choose to buy a house next to an infill McMansion if they could just as easily buy down the street.

Because sellers and agents know the above phenomenon it is common to list such properties for less simply to get a buyer. BAck during the peak it could be successfully argued that it wasn't such a big deal since in in town neighborhoods
houses were turning over so fast. Now that that has cooled people have a choice. If a developer decided to put up some condos next to my house I would fight it simply because I don't want the noise and the ultimate discount I'll have to give to a buyer. Is it fair ? Who knows but it is reality.
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Old 11-30-2010, 12:43 PM
 
9 posts, read 13,751 times
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Agreed. The question is, should the neighboring properties have such an impact on the fate of a project that could benefit the city and the area overall?
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Old 11-30-2010, 01:07 PM
 
152 posts, read 237,782 times
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Quote:
Originally Posted by sk8t View Post
How does access to rail drop a property value? I'd pay more to live next to a rail transit station fir the convience.
The proposed light rail between Lindbergh and Emory would have required tracks to be erected in neighborhoods with close proximity to homes. Note this is not the same as access points. Ever see the Blues Brothers where they lived next to the CTA track ? Granted its a bit of an exaggeration but would you prefer to live "under" a track simply because it is near a form of public transportation ?
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Old 11-30-2010, 01:12 PM
 
Location: GA-TX
442 posts, read 678,767 times
Reputation: 202
Quote:
Originally Posted by Somoso View Post
The proposed light rail between Lindbergh and Emory would have required tracks to be erected in neighborhoods with close proximity to homes. Note this is not the same as access points. Ever see the Blues Brothers where they lived next to the CTA track ? Granted its a bit of an exaggeration but would you prefer to live "under" a track simply because it is near a form of public transportation ?
That depends. Is Marta usually noisy?
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