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Beware the Housing Trap: Inflation Breeds Constraint
Developers face a challenging dynamic where current users in a constrained market are willing to pay exorbitant amounts for existing properties. As the use value of real estate rises, land values inflate, making new developments increasingly difficult and costly to pursue regardless of zoning regulations. This scenario illustrates that as prices escalate, the incremental cost of new construction also increases significantly, creating a cycle that limits development potential and exacerbates the housing scarcity.