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Comment by WalterBright | Hacker News Reader

> greedy developers

What's wrong with people building things that others want to buy?

Here (https://www.theguardian.com/commentisfree/2018/may/29/skyscr...) is a good article that explains it well.

Plus, I don’t think housing should really be left to the free market. This is the UK after all, social housing is one of the best things we’ve ever done (IMO).

The article is full of bombastic statements like "They are loved by virility-obsessed mayors."

I.e. the article isn't credible.

The author is previous deputy chairman of the National Trust and English Heritage.

A quick search would’ve shown you who the author of the column is.

https://en.m.wikipedia.org/wiki/Simon_Jenkins

Doesn't matter who he is. If he wants his article to be taken seriously, he shouldn't fill it with unsupportable bombast.

People buy things without accounting for externalities (which were not forcefully included in the price by govt regulation). Some buildings that people want to buy have negative effects on the rest of the people living in the city. Hence, there is an argument to be made that there is something wrong with certain kinds of buildings. These might be super high rises or it might be a polluting factory in the middle of the city.

What's wrong is that there is no profit in selling real estate and housing at below market value, by definition. And in places like the bay, market rents are not affordable to an increasingly large population. Hence, the greedy perception. Developers are acting in self interest and the old system of financing predicated continuous wage growth.

Not building towers will result in even higher prices for housing.

At least in the UK the price per square foot greatly increases after each new build that replaces an older one. Surely prices would go down? You can even verify yourself. Go on a property portal such as Zoopla or Rightmove and compare the cost of a new build and old build in the same area. I have yet to find one where the new build is cheaper per square foot.

Of course, people like newer things. But how was the cost of surrounding old builds affected?

> But how was the cost of surrounding old builds affected?

Not sure I understand?

Edit: Anyway, the poster I was replying to was making the point that these towers are alleviating demand and subsequently pushing prices down, which is not happening.

That is not what I wrote. I said the prices with the tower would be lower than prices without the tower, which is not the same as saying prices would decline.

I.e. relative vs absolute.

https://content.knightfrank.com/research/478/documents/en/20...

This research shows that there’s an average of 1.5% price increase per floor. Care to share a counter-claim source?

Increasing the supply of something simply does not cause price increases. If the price increases, it's because demand is increasing even faster than supply.

At this point there’s no way you aren’t pulling my leg. The research paper showed that increasing the amount of floors increases the price per floor. Are you saying that these towers control demand? So if they lower the amount of floors then suddenly demand is going down because they are cheaper?

Also I do hope you know the context of my posts relate to the UK market?

People like living high above traffic. There's a reason penthouse apartments are at the top.

Bar the main roads, there’s not a lot of traffic down residential streets in London.

I meant "people who might have bought an old home instead went to the new one".

If I have a market of 10 dumpy old cars, people will pay X for it. If I destroy 1 dumpy old car and add 2 brand new cars, people will pay more for the new cars (like your new building) but the dumpy old ones will be slightly cheaper.

Prices will still rise if demand is increasing faster than supply. If supply remained constant, the prices would rise even faster.

Sorry I’m talking in relation to the UK. It’s a much different reason for high prices here than somewhere such as SFO.

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