Comment by torginus

18 hours ago

I think most developers have a captive market. They don't really compete, they build whatever they want, and still sell, because somebody somewhere will still buy, since they know they can sell for more.

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torginus

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asdff  17 hours ago

The units are basically commodities. Same floor plans same amenities same building about the same rent. True across the country for these sort of newer buildings, only real difference is the pool doesn't close for the season for those in milder climates.

It is designed to be this way for investors more than consumers. Investors want these units to be as fungible as possible so they can better compare local market dynamics. Commodity trading has a lot of advantages for the investor after all. The consumers have no choice really but to be in this market if they want to be sheltered at all. It isn't like you really can exercise free market selection for something necessary like shelter. You have to take what has been made available and you cannot do without.

There is therefore no incentive to make a smart building that is favoring the tenant since this doesn't grow the potential pool of tenants in the area, that pool remains the same size as it was. It is unlike a lot of other markets where having a better product might actually grow the customer base of the product segment overall.

  • torginus  5 hours ago

    > Investors want these units to be as fungible as possible so they can better compare local market dynamics. Commodity trading has a lot of advantages for the investor after all.

    I think you hit the nail on the head. Lot of the finance machine works on standardization, like the are some building techniques, like spray-on insulation that work perfectly fine, but banks wont approve a loan on a building like that because its hard to inspect and repair.

    This ironically makes these crappy buildings built to investor standards expensive, since banks will give cheap loans for it, on account of having low maintenance costs.

    Of course all this exists only on paper.