That's not even remotely true. Cost of construction is typically 60 to 80% of the cost. In high cost of living areas land is more expensive but so are construction costs.
You are wrong. For instance in Southern California the cost to build new house is around $350 per sqft. Building 2000 sqft house is around $700K. House like that may sell for around 1 million. So that would be 70% construction and 30% land.
Plus the developers need to be able to make a profit after accounting for operational expenses, closing costs, etc. If there's no financial incentive, nobody is going to build houses.
This myth of zoning being the only factor is maddening. It's almost like the California folks think their housing market is the only one. Plenty of jurisdictions have loose zoning laws and we still see skyrocketing property values. There's interest rates and inflation to consider.
The cold hard truth is: when a bunch of people all want to live in the same areas, housing is going to be expensive. There's no way around it.
I was getting quotes in that range in Denver until recently, but now I've been getting quotes for around half that. I think they were trying to keep prices up after the supply chain issues have slowly been fixed and pocket the difference, but the market is slowly becoming more sane.
I expect it to drop to below $200k here once they finish rebuilding the thousand or so homes one of our recent wildfires took out.
It's not just manual labor. You need an architect, structural engineer. Getting all permits, environmental analysis. A lot of expensive "knowledge workers" involved. Then there are materials, rental of construction equipment, insurance. Developers who build large number of row houses at the same time can get costs down through economies of scale.
In the county next to me you can self certify and pretty promise you did all that "knowledge worker" shit. No one will ever check, the self certification just promises you did the stuff and the government promises they won't investigate. Somehow not everyone is dying in city-wide house fires.
Sounds like southern california done fucked themselves with over-regulating that stuff.
It's because its used as a vehicle for bribery. See Jose Huizar the former LA city councilmember who pleaded guilty for bribery a few days ago. If its easy to get things built then no one would be paying you in paper bags of cash to get things built.
Our buildings are built to withstand earthquakes that could level other cities, because we have frequent earthquakes, and building codes were dramatically strengthened following the 1994 Northridge Quake.
A single Ritcher 5.8 quake in Virginia in 2011 caused $300 million in damage and disrupted utilities for days in 12 states. A series of earthquakes in 2019 (6.4, 5.4, and 7.1) in California caused so little damage that it's hard to find a tally. Power was knocked in some cities and restored within hours.
Yes, CA construction is more expensive. But it's also stronger and more resilient than the cheap crap in the county next to you.
Valid point. I looked up average materials cost for a 2000 sq ft house and it was estimated at $120k. Materials costs vary much less across the country than land and labor.
For 580k I could hire 2 skilled men and 3 undocumented immigrants for a year.
There's a lot wrong but a lot of it is in your assumptions. For starters there's more than 2 skilled trades that go into a house for starters. Then by hiring them yourself either you or one of those people are going to be playing project manager to make sure they don't run out of materials which is a job in and of itself if you're not familiar with it.
Hey you can play fuck fuck games all day about how 5 person years of labor, almost half of that highly skilled (I'm accounting ~150k+ all in compensation) is not enough for a cookie cutter 2000 sq ft house. I'm calling bullshit; if it really is taking that much for a McClone basic bitch house then someone is taking the piss somewhere.
I said "in major metros" - as I shared in a peer comment in SF (the highest construction costs in the world) it's about 40% and in San Mateo it's like 15-30% depending on finish.
Outside of major metros, zoning makes houses much bigger, twice as big on average as the 70s.
