narcoleptish wrote:The developers are the landlords and lowering rents is not on their list of reasons for building more. Most landlords want more units, ideally in taller building where the economies of scale make so much more sense, but the smart ones keep an eye on the future and the inevitable market changes that always happen. No one wants to be opening a brand new 300-unit building two months after the market has been declared "overbuilt". Remember the condos?
Sure, no developer goes into business with the goal of adding supply to lower the median rent, but it happens in healthy markets with a healthy vacancy rate. Developers still make money, and lots of it by adding units to a healthy rental market, which is literally the worst case scenario, not some crash. And we're not living in anything close to a healthy rental market. Building more market rate housing--even luxury units--is in the interest of anybody who cares about affordable housing.
Moreover, developing apartments is nothing like developing condos. The terms of the financing is different, its easier to raise capital, and there are more ways to save the project for both the debt and equity sides of the project if the stuff hits the fan.
Anyways, its these 'smart ones' who sit on underused property in the Isthmus and intentionally drive up prices to their own benefit, even though they're already super rich. I'm looking at you, Mullins and Korbs.
If the city has underused land they are looking to develop, they should direct that land to developers that will build residential and help make the Madison apartment market healthy.