[hiAndrewQuinn]

I am so, so glad you brought up what should be the obvious conclusion here. "B-but they spent all that money, how do they get it back!?" "That's the fun part, they don't."

Creative destruction is a woefully underappreciated force in capitalism. Shareholders can lose everything. Debt can be restructured or sold for pennies on the dollar. Debt can go unsold and unpaid, and the creditors can lose everything.

I think here it has to be mentioned that bankruptcy in the United States actually works very differently to bankruptcy in the European Union, where creditors have a lot more legal means at their disposal to haunt you if you try risky plays like taking on more debt to moonshot your way out of your current debt. In a funny way, a country's bankruptcy laws are their most important ones when it comes to wealth transfer.

[appreciatorBus]

It's also a common misconception in housing debates!

"B-but the developer always has to make the money back so rents & prices can never go down!" "That's the fun part, they don't!"

The builder/buyer/lender/landlord/etc can go bankrupt but as long as the building actually got built, it will carry on and benefit the rest of us, regardless of what happened to the ppl who paid for it to be built.

Also fun when landlords claim to be "housing providers" "No actually, the housing will still be there, even if you sell, even if you lose your shirt and get foreclosed on"

[bandrami]

IDK, there are whole developments in FL that are just going to be bulldozed. Same thing happened in TX after the S&L crash 35 years ago.

[appreciatorBus]

I’m not familiar with either, but feel free to share a link.

If the buildings, I assume single family houses, were built in places that few people want to live, or places people are simply forced to live because they can’t live where they want to live, then it wouldn’t shock me if someone chose the bulldozer as the best option. I’d argue that the root cause is bad land use law that doesn’t allow construction in the places people really want to live, but that’s a whole other topic of course :)

My argument, both for AI, railroads, telecom and construction, is that if you built something tangible and useful, it can outlive your financial arrangements, and go on to serve humanity, even if you go belly up.

But for residential construction, location is everything, you could build a theoretically useful building, but in a location that few people want to voluntarily live in, far from jobs services, shops, friends, and family, etc. Ofc, you could build a railroad between two unpopular destinations, or run a fibre optic line between two places with little demand, and those would probably not outlive your finances and might be torn up or abandoned too.

[csh0]

I looked it up since I was also curious. There’s this story making the rounds right now in FL: https://youtu.be/ia1qP1DmJdg

It seems as if these are developments which didn’t get completed.