Lee asked in Business & FinanceInvesting · 6 months ago

Can an extremely wealthy person lower prices in a particular area?

If someone with a lot of money to lose came into a very expensive area and built hospitality buildings offering housing, food, and more at extremely cheap or even free rates, what would happen to the cost of living in that region?

Would there be a dramatic drop in prices and could it ruin a place because it happened too rapidly?

Explain.

4 Answers

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  • 6 months ago

    Supply and demand, EVERY increase in supply should put downward pressure on prices.

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  • 6 months ago

    they definitely could lower the real estate values and the quality of life for neigh orhood residents. This has already been tried! https://www.seattletimes.com/nation-world/milliona...

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  • 6 months ago

    once lots of low class losers move together at the same area of course it will get ruined. look at the areas with low costs accommodations subsidised by government

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  • Anonymous
    6 months ago

    Chances of anyone doing that is near zero. In a small city near me, there was a Hardees, McDonalds and a local brand, Jacks. When McDonalds came in years later than the other 2 and did well, compared to the others. I thought Hardees had the best location in that it was easiest to get to for anyone going to work from a certain direction. But, I did not eat any of them enough to have much of an opinion about their food or service being terrible.

    Then came in a Burger King in sort of what was a parking lot of what used to be a supermarket but is now a thrift store. Its also a rocks throw or two from the local burger place, Jacks.

    Jacks had been there the longest and they have a history of opening in places where its too small for the others.

    I thought all the newfound competition would put them under. I posted a poll on a local message board about which would close first, because I was almost sure all 4 could not last and McDonalds for sure was not going anywhere. Most people said the Hardees was crap, terrible food & service. They were right. It closed first.

    A new entrant can & will take business from others but it will also create more overall business. But nobody with a lot of money to lose makes stupid decisions.

    A Shoneys was looking to come to the area and I felt positive they would not make it. They changed their mind & backed out despite being given free land or a heavy tax rebate. (I am unsure of the exact amount offered but it was significant) They were considering building a new freestanding building on the free land.

    I am guessing the free land came with strings such that they would lose the land if they closed it too soon or something.

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