What's Missing From the Housing Recovery? New Condos | realtor.com®: "With the last financial crisis now firmly in the rearview mirror, builders are swinging their hammers again and putting up sorely needed new homes. But something’s missing amid all the scaffolding: condos.
Their absence is already being felt by first-time and cash-strapped buyers contending with record-high home prices thanks to the lack of properties on the market. Condos, which are often more affordable than traditional single-family houses with backyards, may seem like a solution. But builders are shying away from putting them up, even in urban areas, where they're often the most concentrated. Why?"
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To put it bluntly, the answer is because growing income inequality makes it more attractive to build luxury homes for rich people, and because building cheap condos leads to construction defect litigation.
1 comment:
Evan McKenzie wrote... "To put it bluntly, the answer is because growing income inequality makes it more attractive to build luxury homes for rich people, and because building cheap condos leads to construction defect litigation."
According to Jon Caldara, president of the Independence Institute ("Colorado's Free-Market Think Tank", think of it as the Rocky Mountain version of the Cato Institute):
For those of us who remember the Denver economic crash during the 80s, when whole buildings went vacant, the challenges of rising property values are to be celebrated. Gentrification means the market is hot. That’s great for some people and frustrating for others, like the crash was great for buyers and devastating for sellers. By the way, don’t fall for the fib that Denver is now crash-proof.
This doesn’t mean government hasn’t helped push starter homes out of reach. Condos are the gateway drug to home ownership. And Colorado’s war on this gateway drug is keeping people trapped as renters.
Developers don’t want to risk their capital on building new condos when one mistake in construction can wipe out their entire investment. Our state has some of the worst laws in the nation for suing on “Construction Defects.” English: it’s so easy to sue condo developers out of existence that they simply don’t build many condos anymore.
- Denver Post. 06/23/2017.
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