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Originally Posted by Wolven
No, developers just need to build a house. If it looks as fancy as that house down the street that sold for $1.4M then this house can also sell for $1.4M, even if it only cost 900K to develop. If someone built the exact same house for $400,000 less then there would be a tidal wave of buyers trying to get to the cheaper house. But no private developer would want to give up that much profit and neither would the private realtors.
You would need a non-private developer to step in and change how the market works.
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I'd love to argue point by point, but we disagree on a few fundamental issues that probably makes that pointless. But I'll try to sum up what I think you're missing
Private developers aren't really steering the ship here...buyers are. Developers don't set the prices, buyers do. Of course developers look to maximize profit by optimizing the demand vs cost ratio. This is actually a pretty damn strong safeguard (though certainly not perfect, but it's backed up by building codes and land-use) that ensures builders build things that 'make sense'. If they build something undesirable to buyers, it won't sell or will sell cheaply.
Demand determines viability of projects. There is only so much demand for any given type of housing in an area at a given time, be it condo towers, SFHs on the outskirts, or infills. We are well below meeting demand for infills compared to the other two, and we also know that infill development is more sensible and sustainable for the city as a whole in the long run (which isn't to say neighbours are wrong to dislike it). This is why it's called the 'missing middle', and why there is a lot of untapped potential that can be unleashed through better land-use.
The challenge with starting a public developer is that private housing starts would drop by a roughly corresponding amount, and we'd add very little extra supply. Unless of course you build so much publicly that you completely eliminate the private sector, but it's unfathomable to me how we'd ever actually achieve that (or if it would actually be beneficial) - at least without a lot of pain in the process. The one way you might be able to build publicly without significantly undercutting private starts is to focus exclusively on very cheap housing, which sounds good in theory, but usually doesn't work out very well (but I'm not opposed to trying!).
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The oversimplification of how housing developers "make profit" and then convert it into a self fulfilling argument that what they do is acceptable because "someone buys it" really scores no points. Of course someone is buying whatever the private developers build, what choice do they have? There are no alternatives in Calgary aside from buying something from a private developer. That doesn't mean that it is good or that the private developers are not inflating prices in order to inflate their profits... what it means is that there are no alternatives. People are just hoping that they are buying from an honest private developer instead of one that cuts corners while also overcharging for what they built.
It is also interesting that at the same time you are advocating that the city is doing a great job in this rezoning effort you also say that they would be "messy" at doing the building themselves. Which one is it? Is the city clever or a hot mess?
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To the bolded: they have the choice to not buy or buy literally any other home for sale in the city. It's the ultimate free market (albeit heavily regulated) - thousands of unique products at any given time, with new offerings every single day. Again, builders don't set prices; buyers do. The barriers to entry aren't low (lowest for small-scale infill, which is artifically constratined), but if building is really as lucrative as you say, why wouldn't more builders enter the game? For all of capitalisms many many faults, it actually works pretty well for housing because it is so diverse and competitive.
To the last point, I'm not one to automatically lament bureaucracy as most people like to. Again, I'm a socialist, and most 'red tape' is important, beneficial to society, and makes sense for most government functions...but it is also slow, expensive, and frustrating. There is a balance to be struck (which re-zoning itself seeks to better achieve), but public projects simply cannot magically avoid it all, nor should they.
I say city building is messy and complicated. I say the city is a lot better in its role as regulator than most people give it credit for (albeit far from perfect) because most people don't understand how detailed and complicated things actually are. But building is another story. The financial side would involve multiple levels of gov't (slow), and even if it didn't the city is still bound by the MGA (limited in what it can do). I'm skeptical they could build any cheaper than long established big builders, and removing the profit motive removes urgency.
There are just so many other fanciful 'think big' societal ideas that could actually move the needle on making our world better (I'm obviously not convinced public building is going to move the needle at all)