Submitted by googoobah t3_11cku2n in Futurology
rileyoneill t1_ja6esx2 wrote
Reply to comment by the_6th_dimension in So what should we do? by googoobah
The general trend to go from something human made to machine made is a massive reduction in cost. While the companies that do this for a while, eventually competition shows up and drives the cost down. Markets become flooded.
Gutenberg did this with books. His original goal was just to use the printing press to sell printed bibles at hand written prices. But once others figured out how the technology worked the price of books plummets. Once people start mass producing books it becomes very hard to keep them as expensive items.
The big profits don't come from high prices, the big profits come from an enormous volume of sales.
Difference. A landlord owns 3 rental properties. The way they maximize their income is by having the rent as high as it can possibly be. They don't have 4 properties or 5 properties. They want the absolute highest rent per property.
As where some sort of AI Architect/Engineer/Builder company could be going in a city and building not 3-5 units, but building 50,000 units, or in a place like Los Angeles, 2 million units. The goal isn't to become a landlord but get them all sold, even if at a modest profit of $20,000 per unit, that would be billions of dollars in profit.
Then figure they are going to do this in Orange County, and San Diego, and San Jose, and San Francisco, and Sydney, and Portland, and Vancouver, and Chicago, and Miami, and Austin, and Denver. Instead of trying to maximize profit off a few units, the goal will be to maximize profit by building enormous quantities of housing in city centers.
There is far more money in building millions of units, giving the real estate market total shock and awe by collapsing local prices. Sucking up all the renters as buyers and then expanding into other markets. Flood a market like Greater Los Angeles with 4 million units of housing and the price on all housing will crash.
The rush of buyers will have the all time deal of the century on a new condo in LA and then the existing home sellers will find themselves in an impossible to win situation.
Viewing a single comment thread. View all comments