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Comment by katmannthree | Hacker News Reader

Modest housing at that, not the "luxury" apartments that are springing up everywhere.

Any new housing is good, even if it's luxury; when people move into luxury apartments, it relieves demand on wherever they were living before, lowering prices.

This. If we refuse to build luxury housing, people who could afford it will just outbid everyone on whatever we do build, because they need to live somewhere. And it may look like they're springing up everywhere but we're barely treading water, the absolute numbers still aren't keeping up with influx.

By definition all new construction is "luxury" when the "non-luxury" competition is 80 year old apartments buildings. How do you expect an apartment building that has yet to break even to be cheaper than an old apartment that had 80 years to net the owner a hefty profit?

This reminds me of Berlin where rent control is being proposed. For reference the average rent prices there are 7€/m² and rent control will limit it to 5€ per m² for buildings that are older than 50 years (not an exact number).

How do you expect to ever profitably build something for 5€/m²? It's impossible and therefore won't happen. New buildings will probably start at 10-12€/m² and go down once they are 20 years old.

There's a difference between new and shiny and new and expensive. The new developments are made with premium stainless steel and granite finishes, unlike the 30 year old building I live in which was made with cheap vinyl covered MDF cabinets and countertops. There's no non-economic reason people couldn't make modest housing today, they just don't because they can make more money by building luxury housing instead.

The new housing is not expensive because it's "luxury", but because it's rare. Just like the old modest housing is.

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