Question

The city of Sacramento is seeing an increase in capital-intensive housing in the city. What does the model tell us about the forces driving that choice on the part of developers?

Answer 1

Given that there is increasing capital-intensive housing project booming in the city, this shows that there are certain forces that is driving developers to use capital-intensive housing project. Such driving forces could be:

1) Government Subsidized capital intensive technology for housing

2) Higher housing demand per unit time

3) Lower price for capital intensive tools & techniques

4) Availability of higher skilled labor that operates on capital intensive tools & techniques

5) Abundance of capital intensive tools & techniques

6) Free flow of knowledge transfer for promotion of capital intensive housing project

7) Higher level of innovation, research & development in areas of capital intensity of housing project

8) Cheaper borrowings from the banks and market

9) Higher Foreign direct investment

10) Tax concessions on capital invested

11) Higher demand for modern houses with state-of-art architecture and modern amenities