7 ms·

Location location location. You seem to be asserting that the land value is arbitrary simply because it's located in a different area. The value is higher beca

• Slartie 7y ago
  But you can arbitrarily depress it. Its value is the sum of all positive aspects (such as good infrastructure, nice views at a river) and all negative aspects (such as air pollution, noise). Implementing a restriction on rents adds a huge negative aspect that however is only negative for those interested in investing for appreciation, not at all for those who eventually live in that place. This should indeed depress the lands' value, just like it would happen if an airport opened up right next to it, but without all that noise. But as long as land costs plus construction costs are still lower than whatever you can get in return via rents, investors should still be inclined to invest in new buildings, they should just not be willing to pay too much for the land, because there's this big negative aspect connected to it.