Month: July 2022

I quibble with the use of the word “investor” here as the real investors are the people who live and work in and around that building, adding value. The putative investor will be simply collecting accumulated rentier wealth, growing rich in his sleep, as JS Mill said.

Landlords grow rich in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.

Someone once said to me there was no way they could be convinced that density would lower housing costs…maybe this would do it. And this was from someone who has traveled to Paris and other cities in France, London, as well as NYC and other dense US cities.

Supertalls are, of course, not the answer to the housing crisis. As the NYU economist Arpit Gupta explained to me, gentle density is what’s most urgently needed to reduce pressure in the housing market. “The vast majority of people in Manhattan live below the 10th floor,” he told me. “Downtown Paris is about the same size and has the same population as Manhattan, with few people living above the sixth floor. So what that tells me is that ‘missing middle’ construction—in the form of townhomes, and apartments that don’t go above the sixth floor—can actually produce all the density you really need in a city.”

NB: Seattle is twice the size of Paris by area but Paris has 3 times the population or 6 times the density yet no one complains that Paris is a mass of impersonal skyscrapers and housing blocks.

This “missing middle” housing is cheaper to construct than skyscrapers, meaning that these shorter buildings can pencil out for middle- and lower-income Americans. By contrast, the per-unit cost for skyscrapers will likely always exceed the budget of average-income workers.

And of course, the only way to get these to pencil out is by lowering the cost to acquire land through ground rents. Lower the barrier to entry and let the city take in more revenue over time…if the city’s finance department is imaginative enough to see that. Or they could preside over budget shortfalls and austerity while speculators play their games.