Real Estate Math is Relentless

I continue to be impressed with the silly and rather elaborate mythology otherwise intelligent people whip up around housing and money.

For example:

Podium buildings with elevators cost more per SF to build than three story walk up buildings. Concrete and steel mid rise building cost even more per SF than podium buildings.

How many times have you seen people lose the minds of the construction of podium or mid rise buildings—claiming that “this is going to make housing unaffordable!”

Okay. First, coincidence is not causation. When there is less sunshine I am more prone to depression. I did not make it rain by feeling bad….

Real estate math is relentless. You can’t construct buildings that cost more per SF _until_ housing becomes unaffordable.

When rents increase to the point where they can support a more expensive form of construction, and it looks like there are plenty of people willing to pay higher rent to live in a desirable place, that’s when you can build a more expensive building.