Letters: Building enough housing
Economist Christopher Thornberg evidently wants us to believe that market economics do not apply to individual real estate developers.
Referring to a proposed retail-residential development in West L.A., he states, “Of the residences, more than 10% will have an ‘affordable’ status, meaning other units will be priced commensurately higher to subsidize them.” Does Thornberg believe that a developer can pass on each dollar of additional cost to the consumer?
Developers are limited by what the market will bear. The recession just provided a stark reminder that the market is indifferent to developers’ costs.
Unfortunately, this distracts from Thornberg’s larger point about the importance of reducing the constraints on housing supply.
It sounds to me as though developers should — privately — decide how many units they wish to build and how big they want their property to be, and then use “anticipatory” psychology by overstating how much they actually want to construct.
This way, when the number of units and amount of retail space are inevitably scaled back because of protests — as they have been with the development Thornberg cites — the result will be closer to what the developer actually wants.
We need to construct affordable housing in areas with convenient transportation links for intelligent, educated young people so they can contribute to our society and so we can all have a vibrant economy.
A cure for the common opinion
Get thought-provoking perspectives with our weekly newsletter.
You may occasionally receive promotional content from the Los Angeles Times.