Quote:
Originally Posted by Bill Bumface
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On the point regarding subdividing a lot and putting up 2 $800k places, I actually think this does help. Once developers burn through the demand of wealthier people looking for a more dense option (duplex instead of single family), the profits will start to dry up, and they will turn their attention to other underserved sectors...
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I would say the duplexes themselves are an indication that catering to wealthy buyers is self-limiting.
For a builder, a duplex has a lot of additional costs that a larger single family home wouldn't, such as the 'party wall', double the appliances, furnaces, hot water tanks, more doors, trim, hardware, bathroom fixtures, larger garage (2 doubles vs. usually a triple) etc...
The margins would be better if the developer could get $1.6mm for a single family home over two $800k duplexes, but the market doesn't support those homes at $1.6mm, so an equilibrium is found where the developer builds a side-by-side because it maximizes profit... And the price attainable for the single family homes is somewhat ironically limited by the zoning (and prevalence) of duplexes <- And this is the point where everyone crosses their arms and nods, "good".
The real winner in this whole ground floor access built form seems to be the 4-plex & townhomes that fit on a single 50' lot... Where a single family home might cap out at ~$1.4mm in these areas and a duplex at $800k (these prices feel low for today, but I'm rolling with the example given), the 4 plex or townhome units will still push $600k each (and more), providing the most potential margin to a builder, and therefore being constructed more often.
This is why I'm a big fan of the arterial upzoning and this built form, because I think it does more to address the often-cited "missing middle" far better than a 3 bedroom condo practically could.