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Reply #5: Cap rates is short for "capitalization rates" btw [View All]

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Leopolds Ghost Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-12-12 02:14 AM
Response to Reply #4
5. Cap rates is short for "capitalization rates" btw
Capitalization here referring to profitability of each new resident for the city coffers. Certain "types" of residents are marked down as net-winners, and certain "types" are marked as net losers. Similar math is used to determine set-asides for low-income housing, to limit the amount of actual low-income people as much as possible (and by developers to ensure economic segregation of units in a housing cluster -- this is considered mandatory in real estate marketing because according to all market studies, Americans will not buy a house in a new development if there are houses priced significantly higher or lower in the same block -- they will only purchase if there is conformity. The studies suggest this occurs for the same reason that massive paranoia sets in when a gated community starts to lose value, resulting in attempts to seal off the neighborhood from "undesirables", as we see in violent incidents like the Trayvon Martin case.
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