Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How much do construction costs matter to the price of housing?

constructionphysics.substack.com

Post reply on HN
Print view View original

131–140 of 343 posts

Re: How much do construction costs matter to the price of housing?

#131

Post by nicoburns »

clpm4j wrote: post #121
arcticbull wrote: post #81

Earlier quoted context omitted.

I dont think there's any justification for this position, really. Density in Macau is 20,000 people per square kilometer. Parts of the NY/NJ metro area like Guttenberg are 22,000. San Francisco is 6,600. Hong Kong is 6,300. London is 5,700. There is a ton of room to increase density before we start reducing demand.

High density is not desirable to affluent families when the alternative could be a 3,000sqft single family home with a sizeable backyard in San Francisco, and these people tend to make the rules.

Worth noting that the average property size in London in 705sqft.

Re: How much do construction costs matter to the price of housing?

#132

Post by dockd »

s1artibartfast wrote: post #50

Some interesting historical context on construction costs: 100 years ago the cost of construction was about $45/sqft when adjusted for inflation and today it is closer to $220/sqft, approximately 5x the cost. Blue collar wedges are pretty similar across time, but the cost of house construction (ignoring land) is dramatically higher. The 1914 sears Model 147 house was 900sqft and cost $872 for materials, estimated at…

Did the 1914 house have electricity? With "acetylene lighting plant" being extra, I think not.

Did the 1914 house have more than one toilet? Cost per square foot doesn't cover what goes into the square foot, and fixtures cost a lot more than an empty room.

Re: How much do construction costs matter to the price of housing?

#133

Post by lifeisstillgood »

There was a fascinating conference filmed and on youtube at UCL on this subject (in my history, looking for it).

The upshot is roughly that the owner of farm (hedonic) land knows how much their land is worth both with and without planning permission and the minute housing is thought of the price of the land 10x.

And that's fair - no one wants to look like a chump. So any house building scheme to solve the housing crisis suddenly has this price built in, and thus any house building scheme immediately becomes too expensive to undertake.

There was a solution in UK in early 1950s. A 100% land value tax. If you bought land for 10k and sold it for 100k you owed the government 90k.

This quite simply took the heat out of the market, and allowed the government to invest in roads and schools and hospitals and so on. It mean that UK built two whole New Towns (widely seen as concrete monstrosities) but the point is they got built - enough new housing in a handful of years to create towns that still live breathe 80 years later.

If we want house building schemes we have the answer.

Re: How much do construction costs matter to the price of housing?

#134

Post by brimble »

zizee wrote: post #130
brimble wrote: post #127

Earlier quoted context omitted.

Quality lumber is incredibly expensive now compared with 1914. I owned a 1910s-construction house for a while, and they used huge, thick wooden boards around the foundation where the structure met the stone-and-mortar basement walls, and in the floor joists (visible in the basement), and in the diagonally-run underfloor boards (used where we'd use plywood, today). Nearly knot-free, perfectly straight, that stuff woul…

I'm really curious to know why, in our hyper-industrialized world of today, is lumber so expensive when compared to yesteryear? Is it cost of land on which it grows? Is it increased demand because of population growth? Increased demand because of new uses? Increased demand because of global markets? Is it because lumbar prices were artificially depressed because the cost of growing new trees was not included (because…

My dad, born in toward the end of WWII, has complained for at least the last three decades that it keeps getting harder every year to find usable boards at lumber yards. Tons of them warped, damaged, way too many knots or other problems, and so on, and that's when you are shopping a couple tiers up from the worst stock. I don't know why that is, but that seems to be the trend he's seen over his life. Makes sense, if he came into adulthood about halfway between the unthinkably-nice framing & foundational lumber in that 1910s house, and now, and it was a somewhat continuous process instead of some sudden change.

Re: How much do construction costs matter to the price of housing?

#135

Post by R0b0t1 »

s1artibartfast wrote: post #100
kube-system wrote: post #83

Earlier quoted context omitted.

The standard of construction has also changed since 1914. Not only do few people want to build a 900sqft freestanding home, if they did it today with that Sears kit, it would break nearly every building code in the book. A more equal comparison would be to a prefab or mobile home, which you can get for that inflation adjusted price.

I totally agree that the take away is construction costs are going up over time! This holds true even if you look at price/foot opposed to total cost. Like you said, part of this is differences in what you get, building codes, and amenities. That said, Craftsmen homes are wonderful and in some respects have better build quality than modern homes.

Just interjecting "but building codes!" doesn't make a lot of sense. If the codes are so strict that we can't actually build houses they are failing at their purpose.

I dunno if you've dug deeply into most building codes but they're almost always overly specific in pointless ways and in ways totally unrelated to safety. Getting an engineer to sign off on a design should be enough, especially for a freestanding (tiny)house.

Re: How much do construction costs matter to the price of housing?

#136

Post by R0b0t1 »

giantg2 wrote: post #8

It's all about consumer preference. It seems this article largely misses this. People want to live in specific locations, or have to in order to find work. This drives land values up as demand increases. Policies can make this worse, but the problem will still manifest itself to some degree. (Potentially as affluent people, especially in suburban areas, buying up more land to create setbacks, or simply buying because…

A lot of it is cost of labor. What I suspect is cheap loans to homebuilders has propped up the price of trades and secondarily materials to the point most people can't afford to build their own house in any location.

Then, depending on where you are, you have fixed costs for building in an area like geological or ecological impact statements that can be $20k or more. Too much.

Re: How much do construction costs matter to the price of housing?

#137

Post by jjav »

s1artibartfast wrote: post #50

Some interesting historical context on construction costs: 100 years ago the cost of construction was about $45/sqft when adjusted for inflation and today it is closer to $220/sqft, approximately 5x the cost. Blue collar wedges are pretty similar across time, but the cost of house construction (ignoring land) is dramatically higher. The 1914 sears Model 147 house was 900sqft and cost $872 for materials, estimated at…

While costs have risen, it's not reasonable to compare a kit-house like the ones Sears offered, to a house built on-site.

Looking for kit-houses, I found: https://rethority.com/kit-homes/

Where it says "On average, expect to spend between $40 to $60 per square foot to complete your kit home build."

So that's right in the ballpark of the above inflation-adjusted cost of $45/sqft a century ago.

Re: How much do construction costs matter to the price of housing?

#138

Post by ggm »

davidw wrote: post #33
actuator wrote: post #7

Earlier quoted context omitted.

London doesn't have this problem if I am not mistaken. But housing is very very expensive still. So much that a 3 bedroom 120sqm apartment can be more than 6 million dollars even outside Central London depending on the area.

Tokyo is actually a place where you see this in practice, from what I read. Prices are fairly stable due to lots of new construction.

There is a cultural aspect as well. I am told Japanese home owners dislike buying secondhand, if they have the option to knockdown and rebuild.

Re: How much do construction costs matter to the price of housing?

#139

Post by com2kid »

dragonwriter wrote: post #51
com2kid wrote: post #19

Earlier quoted context omitted.

> For a personal example, my wife complains that an 1800 sqft house is too small. A modern blueprint 1800sqft house, yeah, for sure. But somehow a 1960s split level at 1800sqft is spacious. We are throwing square footage away on multiple large bathrooms, 2 living rooms, 2 dining rooms, and then wonder why the rooms we actually occupy are so small. The recent trend towards 4 story narrow houses doesn't help. A literal…

> We are throwing square footage away on multiple large bathrooms, 2 living rooms, 2 dining rooms Two living rooms (well, “living” and “family”) and two (“formal” and, well, not) dining rooms are pretty common in 1960s homes at the size being discussed. Bedrooms, bedroom closets, and kitchens are probably smaller than newer homes, though. > The recent trend towards 4 story narrow houses doesn't help. Tall, narrow hou…

> Two living rooms (well, “living” and “family”) and two (“formal” and, well, not) dining rooms are pretty common in 1960s homes at the size being discussed.

When house buying in 2020/2021 I looked at over 100 homes.

Very few, if any, of the 1960s houses wasted space on two dining rooms, and a fair number had basements converted to family rooms but it obviously wasn't an original part of the floor plan.

The 1960s split level design is obscenely efficient in space usage. There are plenty of variations on it, but the well done ones, vaulted ceilings, visible interior wood trusses, are still nice to live in today. The only modern amenities they are missing are a walk in closet and a full master bath.

Clocking in at ~2000sqft they can do more than a modern 3000+ sqft home does.

> Tall, narrow houses have been a feature of urban single-family homes for a while, I don't think they are a new trend.

Agreed, but the new breed is much narrower than before. I've been in Chicago row houses, and sure they are narrow, but the new ones they are building around Seattle are insane. It is basically one room then a flight of stairs. 3 bedrooms, one in basement, one on 2nd floor, 3rd on top floor. It borders on unlivable for a family, not to mention anyone over the age of 35.

Honestly it'd be much better if they just made regular condos, instead of 4 across narrow homes of 4 stories, do 4 flats.

Re: How much do construction costs matter to the price of housing?

#140

Post by com2kid »

asielen wrote: post #104
dragonwriter wrote: post #51

Earlier quoted context omitted.

> We are throwing square footage away on multiple large bathrooms, 2 living rooms, 2 dining rooms Two living rooms (well, “living” and “family”) and two (“formal” and, well, not) dining rooms are pretty common in 1960s homes at the size being discussed. Bedrooms, bedroom closets, and kitchens are probably smaller than newer homes, though. > The recent trend towards 4 story narrow houses doesn't help. Tall, narrow hou…

Modern homes have less room to live and more room to store crap.

3 car garages so full of stuff they can't fit a single car!

Modern America in a nutshell.

The number of "parlors" I've seen full of boxes is unreal.

Post reply on HN