Had drinks with a friend who is an architect / developer last night.
We got to talking about a big piece of land he owns in Echo Park.
He is currently planning to develop it as a small lot subdivision and sell off the resulting homes.
I told him this may be a mistake, and here’s why:
If you believe in a neighborhood, why would you want to sell off land you own there? Instead, why not build apartments and collect rents which ought to increase as the neighborhood improves?
Otherwise, yeah, you’re making a lot of money on the sale (less the insane 50% tax you pay on for-sale development), but you’re letting someone else benefit from the upside.