>In the extreme for illustration, even if you get the land for free in Detroit, you cannot charge enough rent to cover construction if you build for the economic segment where most of the demand exists, and in the segments where the numbers work out, there is limited demand and every other developer is targeting that segment.
This sounds like a distortion caused by extreme inequality and high levels of poverty, then.
It's caused by the high cost of construction. $30,000,000 gets you a few hundred mid-market three story walkup wood framed apartments with surface parking and some modest resident amenities.
From which, if all goes well, investors will see moderate rates of return after four or five years. On the positive side, it's all mailbox checks. On the downside, nobody will become a billionaire on the deal. So it's all risk minimization and most possible deals simply are not viable.
This sounds like a distortion caused by extreme inequality and high levels of poverty, then.