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Originally Posted by urbanight93
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The Meggs article is actually very informative. From what the article is saying this is what is probably going on:
1. For over 25 years, developments relied on pre-sales (selling units before construction) to secure bank financing. Since interest rates rose in 2022, that system is broken. Rates are much higher, pre-sales collapsed, and banks will no longer provide financing. As a result, many projects, like NEFC, are stalled — and the city is aware of this.
2. A new funding approach is being put together for this project with help from senior levels of government. Governments will provide financing in return for a share in profits (participation mortgages) – plus they can negotiate public benefits like faster infrastructure or guaranteed housing delivery.
3. We’re likely to see more of this. With the pre-sale model no longer working, governments participating in financing can deliver housing and public benefits more effectively than long zoning battles.
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