Quote:
Originally Posted by Changing City
If you accept Genwhy's point that the market sets the price for new apartments (whether there's a CAC or not) the newcomers aren't bearing the costs. The developers are bearing the costs, and they ought to be paying less for the land as a result. If there were no CACs land values would probably be even greater.
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I think that [they ought to be paying less for land] assumes that land costs being incurred in real-time as opposed to an example of a developer having bought land in the past - whether at lower cost or higher cost.
If you view the cost of the land as a sunk cost, the variables governing whether to proceed or not (at the present time) or wait or get out are on the construction and sales side (ie all those bits need to fit between land cost and market price).
I suppose there are many developers who do acquire the land immediately before developing, but there are probably others who hold land for longer periods before developing.
Didn't Westbank have to add a floor to Shangri-La because the package they had agreed to was too costly?
EDIT - found it:
https://council.vancouver.ca/20060131/documents/a2.pdf