Bitarch’s Column

There is a well-known assumption that if government regulation regarding zoning, green spaces, parks, building height, etc., were abolished, developers would begin to squeeze profit from every square meter of land, building continuous masses of hundred-story skyscrapers.

In fact, it is by no means always profitable for a developer to sell as many square meters as possible in a building where there is no park or greenery nearby. The average price per square meter in such a building would be much lower than in an identical building with appropriate landscaping of the surrounding area. This is confirmed by the example of New York, where the cost of housing with a view of Central Park is significantly higher than similar real estate a block away. Anyone who tries to build over that area would be dragged through the courts by residents of nearby houses, as it would crash the value of their assets.

Skeptics might object—look at Hong Kong, where there is indeed minimal government regulation and the development looks like “concrete anthills.” In reality, firstly, the state intentionally built such blocks to provide “affordable housing” to its voters. Secondly, Hong Kong is a special free zone with a tiny territory in the midst of vast totalitarian China. Accordingly, the demand for real estate far exceeds the supply, and people are willing to sacrifice environmental comfort for the sake of economic and personal freedoms. For a country as huge as Russia, or for European countries, the problem of lacking free space is not nearly as acute.