>>> The risks really seem to come in if you use this model to serve the poor. But as a solution for graduates jumping into their middle-income city gig I think it’s brilliant
Good enough for the middle class, but not good enough for the poor?
Not serving the poor does nothing to solve the problem of people with big salaries pricing out the locals.
If a room costs X and an apartment costs X + 100 and the rich people can afford either enough of them will choose the apartments to raise the price of apartments and out compete the poor people who want those same apartments.
Nothing less than sheer volume of available houses within a reasonable distance of wherever everyone wants to be solves the housing problem.
The real answer is that even massive building isn't a solution because you're externalizing huge costs onto existing property owners. There's no way to do this without redistribution so we need to make sure we explicitly protect the poor during that redistribution.
I see a lot of people say that existing property owners block additional building in order to preserve the high value of their property. This doesn't make a lot of sense to me -- with the ability to build much more, the value of your house drops as more housing comes onto the market, but the value of your land rises by much more, as what was a plot of land that could support 3 households becomes a plot of land that can support 50. Manhattan isn't known for its low property values.
Is that the cost you're thinking of? What did you have in mind?
>Even if, in aggregate, land values increase, densification of an existing neighborhood creates risks for individual property owners they many not wish to bear. If an apartment block is built next door, my old neighbor may have gotten rich from selling, but my plot may not be suitable for putting up yet another tower, and my home may be worth less for its busy, unquaint new neighbor. People experience individual not aggregate outcomes, and individual outcomes are usually riskier than aggregate outcomes. Absent some insurance mechanism, it is rationally hard to persuade individuals to consent to policy changes that, in aggregate terms, would meet a return-to-risk hurdle but at an individual level might not. When market urbanists point to how much more productive and awesome the city as a whole might become, they are missing this point.