marina Posted July 30, 2014 Posted July 30, 2014 Being in real estate, I'm always reading industry news and I came across an article that really stood out to me and after researching more.. it turns out this isn't a novel idea. Apparently this is a growing trend in big cities like London and NYC. With prices in large cities climbing higher and higher, new housing developments are being required to include a certain percentage of 'affordable housing' options in order to get final 'planning permission.' So these upscale developers are addressing this 'problem' by adding 'alternative' side entrances for the building's lower-income residents. Often, it's not just a side alley entrance for 'poor people' but entirely separate common elements like mailboxes, garbage disposal facilities, and staircases. So this literally creates a separation of the 'affordable' housing condos from the rest of the luxury development.. so the rich people never have to accidentally run into the 'lower class' condo owners while living in the same building. My initial reaction was that this is pretty crazy and I couldn't believe these 'poor doors' were being approved by the housing authorities in these cities, but then those same authorities were the ones mandating these 'affordable' units before approving the whole project in the first place! I get that they want a diverse mix of residents in very expensive cities but this is just an example of how screwed up the Fed's inflation policies are... the rich spend their money like it's water because otherwise that money looses value through inflation, so they don't care about paying more and more for the condo units, but how do we, as a general society deal with this new 'class segregation?' Here's the article about the new condo building in NYC: http://www.newsweek.com/new-york-city-approves-poor-door-luxury-apartment-building-260218
Alan C. Posted July 30, 2014 Posted July 30, 2014 People respond to incentives. An example is the way in which businesses automate to avoid hiring people. The State continually makes employees more costly and risky, so businesses seek ways to avoid hiring.
cynicist Posted July 30, 2014 Posted July 30, 2014 I admit that having different entrances sounds weird, but isn't this similar to the idea of luxury suites? People who pay more get different accommodations, like views, furniture, etc. And it's not just inflation: people pay more to live in some area because it's closer to where they work, and if it's in a nice, popular place then the demand is high and prices go up. If you can't afford it or want to save money then you move further away. I get the desire to live in a really nice place for little money but welcome to reality.
cab21 Posted July 30, 2014 Posted July 30, 2014 so in a free market there would not be this housing in the first place. so why do people that could not otherwise afford a location need to move into a location they could not afford on their own, or did not create on their own?
luxfelix Posted July 30, 2014 Posted July 30, 2014 The developer and/or their customers want class segregation? If so, then why not? Is it not a separation in response to the government's ultimatum? Who benefits from this?
marina Posted July 31, 2014 Author Posted July 31, 2014 Yeah, I'll admit I'm torn on this one.. I feel the initial gut reaction most people do when I hear about this segregation, but then my rational brain tells me to pause and consider all angles. So on one hand, this is all created precisely due to the forced government policies mandating 'affordable units' in the first place, but on the other hand... aren't we just submitting to the oppressive hand of the state and adding to the dysfunction by creating 'work arounds' that simply erase the issue on both ends? What I mean is, that on one hand, the developer is adjusting to the demands of the state by creating a compromise that will sort of please both sides.. the rich not having to see the 'mandated' poor among them.. while on the other hand, clearly demonstrating how fed policies create inflation and cause prices to rise to a degree that effects the rich much less than the poor. Basically helping create this level of economic disparity. So for someone with an abundance of wealth, it's much less painful to pay for excess, since they usually benefit from the true value of money first, while by the time it 'trickles down' to the common man.. inflation has taken a deeper hold of the overall economy and that same dollar is literally worth less than it was worth just a year ago in the hands of the rich person. Therefore the rich person got to use it first and capture the poorer person's equity. So to the super rich, it's much less painful to spend a million dollars on a condo than it would be to spend a million on a similar condo a year or two later for someone of more modest means. Inflation erodes purchasing power for the middle class and below in a much more significant way and creates ever greater inequality. This domino effect is on going and actually creates the need to 'mandate' affordable housing since what they're really saying is just 'let the poorer people' have a chance in living in the city .. because if it wasn't for this mandate, the rich would simply take the whole thing over.. (and then who would wash the dishes or watch the kids of all the super rich?) 1
nickhk Posted July 31, 2014 Posted July 31, 2014 Rich folks don't tend to live in tenements, and poor folks don't live in skyscrapers. How is this different than "the nice part of town" vs "the bad part of town" on a different scale? An example is the way in which businesses automate to avoid hiring people. I thought of all the job boards on company websites. Stuff may as well go into the trash for all I know. 1
Psychophant Posted July 31, 2014 Posted July 31, 2014 Dudes and dudettes it is a forced arrangement. Condos which are attractive to the wealthy due to their location, neighbourhood and accomodation have to be accessible by the less wealthy - to not to fall in marxist class thinking, which most likely affects the market price of those real estates negatively. It is basically a workarround to limit the loss and improve attractivity. In a free market scenario. There would be no enforced association.
jacbot Posted July 31, 2014 Posted July 31, 2014 'class segregation?' It sounds a bit marxist to me, and it (the word) taps emotionally into race-seggregation (wich was also a government program) why would "poor" people care about what rich people do or vise versa,.. this artificially using government guns to have people forcefully associate is a bad thing.
marina Posted July 31, 2014 Author Posted July 31, 2014 thanks everybody for your thoughts.. and just a side note.. any specific language I use may certainly be flawed.. I'm still processing this topic myself and trying to figure out where I personally stand, though I'm certainly aware this particular 'problem' is just a symptom of a greater issue...
JamesP Posted July 31, 2014 Posted July 31, 2014 Oh man, this kind of thing is just the tip of the iceberg when it comes to real estate in cities, and probably pretty far down the list in terms of injustices and outrages. I only know enough to say that the amount of government meddling in where you can live and work is nigh on catastrophic.
Kason Posted August 2, 2014 Posted August 2, 2014 If person A makes a deal with Person B on a voluntary basis, They are by definition: both better off. If rich person A wants to live in his own private Villa and developer B want's to sell him it. More power to them. It's only whenever Sam C comes in and Tells both A and B to provide shelter to his buddy Joe D - and if he doesn't, he'll Raze his villa to the ground. oh and cage B in a prison where he's likely to be tormented and assaulted. OH and if B tries to resist Sam C's virtuous judgement. He will shoot him down. 1
Miro Posted August 3, 2014 Posted August 3, 2014 I don't understand what the problem is with people who pay more having better services? (Let's say this housing was build without any government interference). If you fly 1st class, you will get a separate boarding procedure (including a physically separated boarding tunnel) so you never have to run into any lower class passengers. In China you will have a Skyscraper full of millionaires driving BMWs neighboring (basically touching) a total ghetto where people ride 20 year old bikes and push carts. I've never heard either the rich or the poor complain there is a different standard of services. If I came to NY I bet I wouldn't qualify even for the apartments with entrance in the back of the building and I still don't see what is the problem. People who pay less will take a different exit.. why do you care about it? 1
jacbot Posted August 4, 2014 Posted August 4, 2014 I don't understand what the problem is with people who pay more having better services? (Let's say this housing was build without any government interference). If you fly 1st class, you will get a separate boarding procedure (including a physically separated boarding tunnel) so you never have to run into any lower class passengers. In China you will have a Skyscraper full of millionaires driving BMWs neighboring (basically touching) a total ghetto where people ride 20 year old bikes and push carts. I've never heard either the rich or the poor complain there is a different standard of services. If I came to NY I bet I wouldn't qualify even for the apartments with entrance in the back of the building and I still don't see what is the problem. People who pay less will take a different exit.. why do you care about it? Exactly,.., call it "seggregation" is just silly shaming tactic
marina Posted August 5, 2014 Author Posted August 5, 2014 Ok, wasn't using the word 'segregation' as any sort of shaming tactic or any other way except as a way of explaining the current situation of separating the rich condo owners from the 'affordable' condo owners.. didn't mean for everyone to latch on to it so much.. was simply denoting the current reality.. 'class separation' better? I was really just looking for people's views, because I am genuinely interested in what everyone on here thinks... I wasn't taking a side really.. just trying to work through it. Thanks for everyone's reply's :-)
AustinJames Posted August 5, 2014 Posted August 5, 2014 I feel the initial gut reaction most people do when I hear about this segregation Will you please describe what you felt when you had this "gut reaction?" My gut reaction was, "awesome!" I will explain more when I can measure my reaction against yours. 1
marina Posted August 5, 2014 Author Posted August 5, 2014 LOL.. ok, well.... my initial gut reaction was.. to shake my head and think.. WTF?!? Really? Separate entrances solely based on the economic status of the people? How elitist can NYC get? LOL But... after reading more and doing a bit more research, I see how the developer's hand is forced by the housing board in this and how the overall market is so manipulated that it's really not a true reflection of a free market.. though accepting the current corrupted reality, I guess the resulting condo purchases would be 'free market' based since nobody is forced to buy in a building they don't want to live in.. so... it makes sense to me.. it's just that this wouldn't even exist in a truly free market without overarching government/FED manipulation.
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