Re: Not always joking, it seems

In article <SZevj.10910$XI.1084@[EMAIL PROTECTED]
>,
 Jette <bosslady@[EMAIL PROTECTED]
> wrote:

> David Friedman wrote:
> > In article <623mq7F21tpclU1@[EMAIL PROTECTED]
>,
> >  Sean O'Hara <seanohara@[EMAIL PROTECTED]
> wrote:
> > 
> >> In the Year of the Earth Rat, the Great and Powerful David Friedman 
> >> declared:
> >>> Don't you think that if it costs 60K to build and you could sell for

> >>> 150K there would be an enormous number of firms building, and a huge

> >>> number of houses being built? Which suggests that your figure is 
> >>> bogus--either omits im****tant costs, such as land, or expenses of 
> >>> getting permits, or ... --or is for a house people wouldn't want to 
> >>> build.
> >> Or that there's a high demand for houses in Edinburgh which can't be 
> >> met for some reason, such as lack of room for expansion.
> > 
> > If that is happening, it will show up in land prices, at which point
you 
> > can't build for 60K if you include the price of the land.
> > 
> > What is the cost of land to build on? It's the price at which you can 
> > get such land. It makes no sense to say "the price is only 15K, but at

> > that price you can't buy any."
> > 
> 
> What's happening here is that developers are buying up older 
> (Victorian) villas with their own gardens, which house one (large) 
> family and tearing them down to build 20 one and two bedroom 
> apartments with no gardens and limited parking spaces in the same 
> ground.  Each apartment will then be priced at approximately 1/2 the 
> price the old villa (with its grounds) was valued at.

But then your original statement that it costs 60K to build isn't true, 
unless that includes the cost of buying the villa and tearing it down. 
There's nothing puzzling about houses costing 150K if building them 
costs 60K and the land they are built on costs 90K.

-- 
 http://www.daviddfriedman.com/
http://daviddfriedman.blogspot.com/
 Author of _Harald_, a fantasy without magic.
 Published by Baen, in bookstores now