They actually can build homes cheaper than that, there’s a certain price point where they feel they’re making the kind of profit they want which is basically the cost of a older home profit-wise. There’s a recent article that came out that I’m can’t find right now but I read it just a couple months ago that talked about the 400 to $500,000 price range is the profit margin that builders want to make. That means they’re probably making 20 to 30% profit. And while they can build cheaper homes they make less profit so they are not motivated to.
I know it’s not going to happen under this regime but it seems like the solution is to offer tax breaks, subsidies, or whatever we think might give the developers some incentive to build lower income housing.
They actually can build homes cheaper than that, there’s a certain price point where they feel they’re making the kind of profit they want which is basically the cost of a older home profit-wise. There’s a recent article that came out that I’m can’t find right now but I read it just a couple months ago that talked about the 400 to $500,000 price range is the profit margin that builders want to make. That means they’re probably making 20 to 30% profit. And while they can build cheaper homes they make less profit so they are not motivated to.
I know it’s not going to happen under this regime but it seems like the solution is to offer tax breaks, subsidies, or whatever we think might give the developers some incentive to build lower income housing.
OK. you go develop those homes then.
since you’re such an expert and seem to think a 10% margin is totally worthwhile?