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

constructionphysics.substack.com

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

#231

Post by gjhh244 »

88840-8855 wrote: post #56

I agree with the tone in the comments here - and the article. It is the land prices that drive prices. My income here in Germany is alright, according to statistics I am in the top 20% with my monthly income. Unfortunately, I will not be able to buy a decent apartment in the city to start a family if my gf/wife is not also in the top 20%, we get some support from parents and agree to pay off the debt for the next 35…

You could consider working remote / hybrid with a bit longer commute.

There is no need for everyone to live in a big overpriced city.

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

#232

Post by jiggawatts »

brimble wrote: post #127
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.

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…

A detail I liked in the Blade Runner 2049 movie was the office of the Wallace Corporation CEO -- every surface was covered in wood.

Right after seeing that movie I visited an old house where everything is wood. Huge wood cabinets, wood floors, wood ceiling, etc...

I suddenly realised that I can't afford wood furniture any more! The IKEA stuff I buy these days is made of "manufactured" materials that are "wood-like", but have essentially cardboard honeycomb between two sheets of plywood or something.

I used to have IKEA furniture that was solid pine, but good luck finding anything like that in their store these days...

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

#233

Post by JetAlone »

Mountain_Skies wrote: post #5

Thought for conversation: if you are able to work remote but still live in or near a major employment center, are you at least somewhat morally responsible for pricing out those who cannot work remote?

Yes, I do think so. There are plenty of ways we could make selfish decisions about here we live. I also think where a person lives is also highly personal and private and should not be subject to the decisions or judgments of others. Many people cited a pressure to provide/maintain a social environment for their family, so it's not a 1-dimensional decision by any means...

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

#234

Post by alar44 »

bigyikes wrote: post #215
downrightmike wrote: post #160

Earlier quoted context omitted.

Why chop down 100 trees for $1/tree when you can chop down one tree at $100/tree?

The question is, why can you chop down one tree at $100/tree?

Because it's a 0 effort renewable resource.

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

#235

Post by selestify »

moistly wrote: post #220
JKCalhoun wrote: post #207

Earlier quoted context omitted.

I would not be surprised if Canadian lumber was going to China. I believe a lot of Alaskan lumber, if not the majority of it, was China bound (this may have been close to two decades ago though when I had heard that).

Canadians are so stupid that we have allowed raw logs to be sold to Chinese offshore lumber mill ships, to be sold back to us, instead of insisting that the value-added processes be kept on-shore so that we have good-paying jobs for our own citizens.

> so that we have good-paying jobs for our own citizens.

Protectionism isn't always a good idea. Doing so would've made the final lumber output more expensive for Canadian consumers.

Automation is coming for the good-paying jobs sooner or later, anyways. The solution wasn't/isn't to ban outsourcing/automation, it's to better distribute the gains from outsourcing/automation across society.

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

#236

Post by bobthepanda »

joe_the_user wrote: post #213
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.

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 . Lots of people want to build 900 sqft homes. It's just that with land costing 100s of ks and utility hookups etc at 100k, it make no sense to build a 900 sqft house. Basically, areas with high house prices have created a situation building a little house o…

Also, with min lot sizes a 900 sq ft house doesn't quite pencil out at today's land prices. Most jurisdictions would not let you buy a 900 sq ft plot of land, for example, because the size would be too small.

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

#237

Post by jelliclesfarm »

This article doesn’t even bring up construction unions which can hike construction costs by about 20%. IF they allow construction in the first place. SF and London Breed couldn’t get affordable housing off the ground because a proposal by non union modular housing company in Mare’s landing was not within the county.

+

[..] Builders say apprenticeship requirements drive up the already sky-high expense of affordable-housing construction in a state where it can cost as much as $700,000 a unit to build in dense, urban areas such as San Francisco. They also argue that the union-backed provisions could slow or halt construction of affordable homes in lower-income rural and inland areas where there isn’t enough available union labor.[..]

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

#238

Post by bobthepanda »

com2kid wrote: post #139
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…

> 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 spl…

You're basically describing a Manhattan or Brooklyn townhome/rowhouse/brownstone. There the lot size has traditionally been 25x100 ft.

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

#239

Post by jelliclesfarm »

jelliclesfarm wrote: post #237

This article doesn’t even bring up construction unions which can hike construction costs by about 20%. IF they allow construction in the first place. SF and London Breed couldn’t get affordable housing off the ground because a proposal by non union modular housing company in Mare’s landing was not within the county. + [..] Builders say apprenticeship requirements drive up the already sky-high expense of affordable-ho…

https://www.wsj.com/amp/articles/california-needs-more-affor...

[..] California’s State Building and Construction Trades Council, which represents 450,000 ironworkers, pipe fitters and other skilled laborers, has blocked numerous bills it says don’t guarantee enough work for its members. It contributes tens of millions of dollars to political candidates and campaigns, engages in aggressive lobbying, and pays for advertisements that portray opponents as lackeys of greedy developers.

Legislative insiders say the success of the union known widely as “the Trades” is one of the main reasons Sacramento politicians have struggled to pass bills streamlining construction approval and easing zoning restrictions. Researchers say those steps are urgently needed to address skyrocketing real-estate prices and rents, as well as homelessness.

“They’re a gatekeeper for any significant legislation moving through Sacramento” on housing, said Ben Metcalf, managing director at the Terner Center for Housing Innovation at UC Berkeley and former head of the state’s Housing and Community Development agency.[..]

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

#240

Post by bobthepanda »

ClumsyPilot wrote: post #179
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…

"The recent trend towards 4 story narrow houses doesn't help. A literal 1/3rd of the house is taken up by stairs" If you want vertical efficiency, we have apartments for that. You get a single staircase and 20 single-story homes instead of 20 staircases in 20 homes. Its funny that US/UK/ anglosphere seems to have never figured out apartments, in Uk you can't even be a true owner - first you pay leasehold, then you pa…

The US has large apartment buildings, the problem is that there is not a whole lot of anything between 5-20 stories, and there is a construction premium for 20+ story buildings.

(And in the US it would be two staircases and 20 single story homes, specifically because building codes require two staircases to prevent a Grenfell-like disaster.

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