Imagine you're a municipality like San Francisco. You control all of the zoning regulations, and many of the permitting requirements. You have a AA+ credit rating, and even in today's higher rate environment, you can borrow billions of dollars at 6%.
You already own oodles of land. You can build to whatever height you want within reason, because you control the zoning, and you even control many of the ordinances that allow citizens to block development (though certainly not all, like CEQA and NEPA). So you have lots of lands to build on, and what you build is largely in your control.
Construction costs in San Francisco are sky-high, at $440 sq ft. But people will happily pay you $40/sq foot per year for housing, probably for 75 years.
How is this not the easiest decision in the world?
Create a housing development agency, become a permanent developer, and landlord. Never stop building. Put proper incentives in place, so that employees at the agency can partake in the profits, incentivizing them to be efficient. Never stop doing this.
You might not be great at this at first, but fifty years later you will be.
You already own oodles of land. You can build to whatever height you want within reason, because you control the zoning, and you even control many of the ordinances that allow citizens to block development (though certainly not all, like CEQA and NEPA). So you have lots of lands to build on, and what you build is largely in your control.
Construction costs in San Francisco are sky-high, at $440 sq ft. But people will happily pay you $40/sq foot per year for housing, probably for 75 years.
How is this not the easiest decision in the world?
Create a housing development agency, become a permanent developer, and landlord. Never stop building. Put proper incentives in place, so that employees at the agency can partake in the profits, incentivizing them to be efficient. Never stop doing this.
You might not be great at this at first, but fifty years later you will be.