Quote:
Originally Posted by hammersklavier
This is a major point that needs amplification. In older cities where traditional housing typologies never really died (though they did come close), like Philadelphia and Chicago, there is still a great deal of local expertise on how to build to these typologies, which makes pro formas for building new ones easy because the parties involve know how to do it. In cities where knowledge of how to build to these typologies is lost, the lack of knowledge makes attempts to build them seem risky to lenders who are unfamiliar with their economics...which then makes it impossible for these projects to pencil out because they're low-margin to begin with.
|
yeah.
and it's not just the local building culture, but also the local residential culture that goes hand in hand with it.
because chicagoans have been living in flats en masse for generations, they are a totally normal thing here.
chicago home-seekers don't automatically go
"what the heck is this? 3 houses stacked on top of each other? that's weird. no thanks."
in a different market where flats are a much less common typology, that "strangeness" factor might also make lenders more shy.