Re:US bosses now earn 312 times the average worker's wage
by jonathankoren on Friday August 17, 2018 @02:05AM
(#17780608)
True, but who is setting the 50 unit limit? It's the people that already live there and don't want the riff-raff moving in and driving down their property values.
At the same time, if you own an lot full of RVs and mobile mobile homes in a rich suburb, you might end up running the numbers and deciding to throw all those people out, and put up some luxury condos, because you can make a lot more money per square foot.
One think to think about, in a lot of areas where only luxury condos are being built, there tend to be pretty limited numbers of condos being built. If you are a developer and you know you will only be allowed to build 50 units, you are going to build the most expensive units you can so you can maximize your gross profit even if the marginal profit rate isn't as good. If you were allowed to build 1000 units, you might choose to build affordable housing that has a better marginal profit since the larger number of units allows you to have a higher gross profit.