In a true free market economy you are correct.
I would posit -- but am not sure -- that one reason why affordable housing policy can work without adverse economic effect is because we have so much damn cheap land.
It would cost next to nothing to find a piece of vacant land owned in the land bank, and find a developer to build fairly economical housing for next to nothing.
What makes the "Albert" such a mismatch for low income housing is because:
a) rehab costs on an old building are very hard to predict and generally much more expensive than just building from scratch
b) the Albert is a Kahn-designed building in one of the most valuable pieces of real estate downtown.
Like I said, I generally don't want government inadvertantly screw around with real estate economics, but when it can do so with little to no adverse effect, it's worth doing.
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