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Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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For a developer, the multi-unit apartment building requires years to recover their investment and start to see a profit. They are a long-term investment. When they build 150 new 4,000 sf homes at $800k each on 5,000 sf lots, the return is immediate as long as the area is in great demand, as it is now here. For the city, the education dollars are more than covered by the property taxes at about $10,000/year on each home, plus the developer (and eventually buyer) paying impact fees to the school district, unless someone has 5-6 kids. These homes are typically bought by high earners with 1-2 kids just starting school, moving from Seattle, or multi-generational immigrant families with 1-2 kids, and inlaws.
If it's a rental. Condos create the same immediate payback that SF houses do. That's why when land prices get too high in cities, you see rental development stop and condo development start. That's basically happened in NYC.
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Originally Posted by Hemlock140
For a developer, the multi-unit apartment building requires years to recover their investment and start to see a profit.
There used to be a rule of thumb - informally at least - that studio apartments were most profitable for municipalities (because they didn't consume education dollars), 1BR apartments were less profitable, 2BR units were on the bubble (could go either way depending on number of kids in unit), everything larger was unprofitable because they consumed education dollars.
That's why apartments tend to be 0,1, or 2BR and larger apts are hard to find.
I don't understand this logic. The developer's/builder's market is not the school district or municipality but rather the prospective renters. Why would the developer care if its properties were profitable for the school or municipality? The developer is interested in housing that the market of prospective renters would want.
I don't understand this logic. The developer's/builder's market is not the school district or municipality but rather the prospective renters. Why would the developer care if its properties were profitable for the school or municipality? The developer is interested in housing that the market of prospective renters would want.
The developer cares if the municipality can restrict or approve development.
I that's why larger apartments are less common — if they are; they're not here. Boston if anything it's easier to find large apartments than small ones.
If it's a rental. Condos create the same immediate payback that SF houses do. That's why when land prices get too high in cities, you see rental development stop and condo development start. That's basically happened in NYC.
Many expensive buildings in NYC discovered they couldn't sell all the units at the price they wanted and turned the remaining units into rentals. A friend of mine is renting in such a place.
they should restrict, if not forbid it all, single family housing, not multifamily ones!
OK, comrade ...
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Originally Posted by BBMW
People who want SF houses want low density non-urban communities.
Except that not all single-family homes are in low-density, non-urban communities. My nearest neighbor is a driveway's width away. LowER density, yes, but not low.
I don't understand this logic. The developer's/builder's market is not the school district or municipality but rather the prospective renters. Why would the developer care if its properties were profitable for the school or municipality? The developer is interested in housing that the market of prospective renters would want.
Municipalities decide (zoning) where to direct development, and the density to which land can be built. If you limit multifamily development to the other side of the tracks with a maximum density of 8 units per acre, you're guaranteed to have less development than if developers can build 32 units per acre on both sides of the tracks.
Except that not all single-family homes are in low-density, non-urban communities. My nearest neighbor is a driveway's width away. LowER density, yes, but not low.
So I guess class warfare against the poor is okay but class warfare by the poor is communistic?
True if they were allowed to build whatever they want in theory they could fufill the upper market then start working their way down.
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Originally Posted by freemkt
Except where lack of buildable land (often due to zoning) and high land prices get in the way - then builders don't work their way down.
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Originally Posted by East of the River
Yeah that was kind of the point with zoning in place there is less land open to development, which means there is less developers and those that do exist will focus on the higher end to maximize profit.
Quote:
Originally Posted by freemkt
Sounds like class warfare.
Please tell us how the bolded doesn't sound like class warfare to you.
The only way I see that comment as NOT class warfare is if you believe it's only natural and right for government to choose winners ("the higher end") and losers (the people who are left behind when "builders don't work their way down").
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