Is it economically useful to build useless buildings?

[FrodosPet]

Fifteen years ago, China changed its policy so people could buy their own homes. Real-estate investments boomed, and new cities began popping up each year, many inspired by western design and mimicking iconic locales like Paris and lower Manhattan. The problem is: people don't live here. One ghost city in Inner Mongolia, built to house one million people, is now an empty shell of unoccupied skyscrapers and abandoned construction sites. VICE checks out this and other urban failures to figure out how China's preoccupation with growing its GNP turned "supply and demand" into "build now, sell later."

[FrodosPet]

1. Poor Construction: China's Cities are Falling Down

Just because you build it does not mean people will come live in it.

I know...at least they have created temporary construction jobs. Until the money runs out and the hammers and cranes fall silent over the half-finished buildings, which rapidly become a set for "Life After People".

[CK_John]

6. Ask any Realtor they will tell you, it is all about location, location, location.

[LWolf]

2. Until

every human on the planet has clean, well-constructed, safe, secure, permanent housing, there is no such thing as a useless building, imo.

Which, of course, has nothing to do with GNP.

[TampaAnimusVortex]

4. Having a house in an empty city IS pretty useless.

Where would someone work, or shop, or go for entertainment? Might as well be living at the South Pole.

[LWolf]

5. Do we have empty cities, with no homeless people?

Last edited Fri Nov 14, 2014, 06:56 PM - Edit history (1)

If so, why aren't we sending our homeless there?


As soon as people live there, all of the rest follows. Or goes with them.

[tammywammy]

7. So we should be shipping our homeless to China? n/t

[LWolf]

13. .

[NCTraveler]

8. Ronda Storms in Tampa would love to ship our homeless to China.

She would want them to work cleaning her shoes for a while so they could pay for their own airfare. You can inform her of your idea here. https://www.facebook.com/RondaStorms?rf=108297825861452

[LWolf]

14. Of course,

nowhere did I suggest shipping our homeless to China.

[TampaAnimusVortex]

11. Because we have a different system...

The Chinese home building industry is run by fiat command, where ours is more based on supply and demand - as well as unlike China, we can't "send" anyone where they don't want to go (unless their criminal).

I'm personally not for shoving people into rail-cars and shipping them around like so much cattle without their consent. Are their issues with housing? Sure... but putting guns to people's heads isn't the answer either.

[LWolf]

12. Putting guns to people's heads?

Making sure that you fill empty building,s and have enough housing for all before you tear things down is "putting guns to people's heads?"

That makes no sense.

Did I say something about shipping people like cattle? No.

We have a different system than the Chinese, that's true. That's beside the point. Does every single one of the approximately 1.35 billion people in China have adequate housing? That's the point I was making, which you didn't address.

I would add a correction to your description of "our" home building industry, as well. It's "supply and demand for those who can pay for it."

Which is why we can have empty buildings and homeless people at the same time.

[Recursion]

3. Sometimes

There are useless building that are economically good to build. DC is full of them.

[KamaAina]

10. DUzy!!

[Xithras]

9. A major part of the problem in China is their tax model, but the cities won't be empty long.

Because it is still theoretically a communist state, virtually all of the tax revenue flows to the central government, and only a relatively small amount flows back out to the local and regional governments for infrastructure and other maintenance. This leaves those local governments in a state of perpetual poverty.

The Chinese government then did two things that created the current situation. First, they legalized private property ownership. Second, they announced an "urbanization plan" that calls for the partial depopulation of the poverty stricken rural areas of China. Farms will be merged to improve their economic viability, and the "excess" population will be encouraged to move to the cities.

Local governments and developers immediately went nuts. The governments started seizing farmland while paying the owners a pittance, and flipped it to the developers for a huge profit. This actually became the LARGEST revenue source for many local governments around China. The more land they flipped to the developers, the more money the governments made.

Developers, anticipating a huge influx of new residents, built like crazy. The Chinese banks lent the builders countless billions to build out these cities, and the builders expected to repay those loans and make a nice profit when the people started flowing in. In many of the more questionable situations, the local GOVERNMENTS actually pulled the loans for the developers when the banks thought the loan was too risky...in China, the banks can't tell the government NO, and the regional governments are protected against default by the central government.

The problem was that the Chinese government took its own sweet time putting the ACTUAL urbanization plan together, and only finally released their nearly $7 TRILLION dollar roadmap a few months ago. The plan is projected to move around 100 million people from the farms to urban centers by 2020. That will finally fill up these empty cities, and will spur another round of major construction across the country.