I fail to see how Hickey could publish this interview without doing a demolition job on it, which would be ruder than not publishing it at all- I'm sure you would agree. Your snarky "couldn't find the time" comments demonstrate a lack of grace that, although stereotypically associated with Australians, the world had come to regard as merely the stuff of old-school TV comedy.
Your entire rationale that, regardless of zoning, developers only develop property at a rate that maximises profit over the long-term is predicated on those owning property ripe for redevelopment being 'rational actors' with such 'perfect information' regarding the intentions of hundreds of other owners of properties with development potential that they can effectively act as one entity, and 'infinite patience' to obtain the best financial yield- a trifecta of neoclassical assumptions that bear (as is typical of that school) almost no relationship to observable reality.
My personal observations as a recent-past tenant of a cheap 'shit-box' multi-occupancy flat in Wellington from 2019 until May 2023. Unrentable because it fell so far below the healthy-homes standard the cost of upgrading would be untenable, half the site was occupied by a commercial building that required earthquake strengthening or demolition by 2030, but so shoddy as to not be worth the cost of the work. The elderly owner sold the property into a falling market because he had cancer and a heart-attack. The purchaser, a one-man-band 'developer' whose brother is allegedly a builder, signed the contract then struggled to raise the money to complete the sale. He was living in a shed apparently, but is now living on site. Do these people sound like rational, patient, informed, professional individuals to you? No. Now multiply this a few dozen times across the city and you will realise that the actual 'professional developer' who IS meant to be be patient etc. etc. has no option but to proceed with construction at sub-optimal times because he is constantly competing with duffers like the aforementioned pair, who will always act according to expedience and whim, rather than to optimise financial advantage.
In my opinion the limiting factors are the availability of tradesmen to do the work and bank-credit to pay for it. In a city that could be destroyed by an earthquake (plenty of building sites in that case) at any time, in a world teetering on the brink of global financial and geopolitical catastrophe, why would one wait?
This is the problem when wanna be ‘investors’ play as ‘rational actors’. Our mum and dad investors in Australia have no business doing so. This adds to flipping properties and tenant instability.
"Our mum and dad investors in Australia have no business doing so". I would agree that speculation on existing property is a menace that has the undesirable effect you mention.
However, the point I'm making is that the small non-corporate developer, who is maybe a builder in his own right, has personal and business (e.g. personal liquidity, desire to keep his staff employed) priorities that are at variance with those of the professional land-banker for whom the 'rational rationing' methodology, which CM bases his analysis of the demerits of up-zoning on, would make total sense. This variance also has the effect of disrupting the rationale itself, given that the fully rational actor sits hard on the side of keeping supply tight. The less rational actor will , however, pre-empt the more rational by creating supply at a sub-optimal time-thereby thwarting the land-banker's attempted rationing.
I fail to see how Hickey could publish this interview without doing a demolition job on it, which would be ruder than not publishing it at all- I'm sure you would agree. Your snarky "couldn't find the time" comments demonstrate a lack of grace that, although stereotypically associated with Australians, the world had come to regard as merely the stuff of old-school TV comedy.
Your entire rationale that, regardless of zoning, developers only develop property at a rate that maximises profit over the long-term is predicated on those owning property ripe for redevelopment being 'rational actors' with such 'perfect information' regarding the intentions of hundreds of other owners of properties with development potential that they can effectively act as one entity, and 'infinite patience' to obtain the best financial yield- a trifecta of neoclassical assumptions that bear (as is typical of that school) almost no relationship to observable reality.
My personal observations as a recent-past tenant of a cheap 'shit-box' multi-occupancy flat in Wellington from 2019 until May 2023. Unrentable because it fell so far below the healthy-homes standard the cost of upgrading would be untenable, half the site was occupied by a commercial building that required earthquake strengthening or demolition by 2030, but so shoddy as to not be worth the cost of the work. The elderly owner sold the property into a falling market because he had cancer and a heart-attack. The purchaser, a one-man-band 'developer' whose brother is allegedly a builder, signed the contract then struggled to raise the money to complete the sale. He was living in a shed apparently, but is now living on site. Do these people sound like rational, patient, informed, professional individuals to you? No. Now multiply this a few dozen times across the city and you will realise that the actual 'professional developer' who IS meant to be be patient etc. etc. has no option but to proceed with construction at sub-optimal times because he is constantly competing with duffers like the aforementioned pair, who will always act according to expedience and whim, rather than to optimise financial advantage.
In my opinion the limiting factors are the availability of tradesmen to do the work and bank-credit to pay for it. In a city that could be destroyed by an earthquake (plenty of building sites in that case) at any time, in a world teetering on the brink of global financial and geopolitical catastrophe, why would one wait?
This is the problem when wanna be ‘investors’ play as ‘rational actors’. Our mum and dad investors in Australia have no business doing so. This adds to flipping properties and tenant instability.
"Our mum and dad investors in Australia have no business doing so". I would agree that speculation on existing property is a menace that has the undesirable effect you mention.
However, the point I'm making is that the small non-corporate developer, who is maybe a builder in his own right, has personal and business (e.g. personal liquidity, desire to keep his staff employed) priorities that are at variance with those of the professional land-banker for whom the 'rational rationing' methodology, which CM bases his analysis of the demerits of up-zoning on, would make total sense. This variance also has the effect of disrupting the rationale itself, given that the fully rational actor sits hard on the side of keeping supply tight. The less rational actor will , however, pre-empt the more rational by creating supply at a sub-optimal time-thereby thwarting the land-banker's attempted rationing.