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nacho1599 t1_iw0swzm wrote

Reply to comment by Bewaretheicespiders in [OC] Housing has become increasingly unaffordable in Singapore, more so than in other high-cost cities by earthlymonarch

I don’t see how that’s the case. Obviously a tower than can house 500 people would be more valuable than a duplex, but that tower then takes 500 people’s worth of demand away from the rest of the real estate system, decreasing prices.

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Bewaretheicespiders t1_iw13m11 wrote

Im not talking about the value of the tower, thats a whole other thing, but the value of the land underneath it. If you change the zoning from single family house to, say, 10 units on the same area of land, and if there is enough demand, then land value immediately climbs by 10x, because a developper now can make 10 times as much profit on that parcel of land. And that takes away any of the affordability gain you would expect from density.

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nacho1599 t1_iw14t65 wrote

Sure, but it cost the developer $50 million to build that tower, which improves the land's value legitimately. I'm saying the tower lowers the price pressures in the rest of the area because it increases the supply.

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Bewaretheicespiders t1_iw1cuzd wrote

The land value improves way before the tower is built. Sure you build supply, which is better than doing nothing, but that new supply takes way more manpower per sqft to build, AND increase land value, compared to sprawling.

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