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Old 10-19-2010, 06:13 PM   #154
Cawz
Backup Goalie
 
Join Date: Oct 2006
Location: Calgary
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Quote:
Originally Posted by octothorp View Post
It would be unfortunate if that were the case and that's certainly what developers would claim. But it completely ignores the fact that real estate is a free market system. Housing prices are dictated not by the cost that goes into the house, but by the market demand for houses, especially given that new suburban developments are only one of many housing options available to purchasers today. Only way that housing prices will increase is if developers actually decrease the number of houses they build, which is unlikely given that reducing their developments just doubly cuts into their profits. Development is ultimately a volume business.
Yes, but its also a business. The new mayor has said that he will make it tougher and more expensive for developers to do business, and developers will factor that into their business decisions on weather to go ahead with projects or not.
Quote:
Originally Posted by octothorp View Post
You're right, developers can just go elsewhere. But there's a few issues with this: neighbouring MDs and towns must be willing to pay for the infrastructure development costs that Calgary isn't willing to pay. It will take decades for the tax revenue from these developments to cover the infrastructure costs (which is the main reason Calgary would not be heart-broken to see some of these go).
Its also cheaper to develop in the outlying communities. The development standards arent quite as high and the infrastructure requirements for smaller centers are not as large.
Quote:
Originally Posted by octothorp View Post
If some developers shift their attention outward, it increases scarcity of housing in Calgary, driving prices up. Which makes those developers who continue to develop in Calgary able to turn a good profit, despite increased development costs.
Yup, and home buyers foot the bill.
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