Near my partner’s house they finally demolished an abanonded hospital that had been there for decades and I think they are going to build luxury condos that a lot of renters in my town cannot afford.
I expressed my concerns to my partner and he was explaining how its a good thing to create more housing regardless of whether its luxury housing or low income. I said that I wasn’t upset about more housing but how luxury condos will cause rentals in the area to go up due to increased value from slum and corporate landlords. He continued to explain I don’t know economics and doubled down that this will lower rental costs as renters will be moving to these condos freeing up housing across the city. I continued to tell him the condo prices are too expensive for this area and most will remain vacant for a long time as I have seen the rental market in my area and there are condos closer to me that have been sitting vacant for almost two years now because of the price tag and the condo fees
We dropped the conversation there because we stood very opposite in this debate. And sure I don’t know a ton about economics but what I do know is that rental prices in my area I can’t find a place under $1700 right now. I am currently fighting my landlord against an eviction because they are refusing to accept government rental assistance I applied and got approved for. I can’t move I can’t afford it I can’t beat $1100. My partner thinks my case is sad but he still stood where he does on the issue mostly because he makes way more money than me.
So please explain basic housing and economics like I am five.
In: Economics
In simple terms the people who can afford a luxury condo for $4000 a month have to settle for a $2000 apartment now because there is not enough luxury condos on the market. If they build more luxury condos they will move out of the $2000 apartments and into the condos. The landlords is then left with apartments and have to lower the price to $1700 to get people to move into them. That means a lot of $1700 flats are not finding people to live in them because they can get nicer apartments so these will lower the price to maybe $1500 to find tenants.
So building luxury condos is going to lower the rental price. It is better then leaving the old hospital in place. But they could have built maybe three times as many affordable flats. That would house three times as many people and end up lowering the prices even more.
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