Re: Not always joking, it seems

David Friedman wrote:
> 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 important 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.
> 


If a villa with land costs 200K, but you get 15 apartments in that 
space, with build costs of perhaps another 200K, then charging 150K 
for each apartment is a tidy profit.

Oh and you also tie the new owners to a "factoring" system owned by a 
subsidiary company of your own building company, which charges them a 
few thousand per year to do next to nothing.

-- 
Jette Goldie
jette@[EMAIL PROTECTED]
("reply to" is spamblocked - use the email addy in sig)