4 ms·

I hear an argument a lot, "housing in the Bay Area is expensive because because labor cost is so high." According to this report in San Francisco it costs $269,

I hear an argument a lot, "housing in the Bay Area is expensive because because labor cost is so high." According to this report in San Francisco it costs $269,000 to build a new housing unit. With the median home sale price over $1,000,000 it seems fair to say that the labor component isn't the primary driver of the high costs, it's probably related to the inability to legalize enough housing.

tehlike 9y ago
Labor is definitely not the main driver. Often quoted construction price is about 300$/sqft around where i live. If you were to build new, you would spend 750k-850k. Now, you cant buy land for less than 1.8 in mountain view that can hold 2500sqft home. And sale price would be close to 3m anyways.
- maccard 9y ago
  Maybe one of the issues is the expected sizes of homes in the US - 2500 sq ft is about 250 sq m - which is pretty darn big. The average home in the uk is about 85 sq m...
  - jdavis703 9y ago
    No, this doesn't have to do with construction costs (which are about linear with square footage), it's other factors. For example, even if someone wanted to build a tiny home (i.e. less than 500 square feet), it's illegal in many places because of minimum square footage requirements. The problem comes from bad land use planning, not because "dumb" Americans don't understand a larger house costs more money.
    - tehlike 9y ago
      True that. There's the other side of the coin though. South bay (excepting San Jose) is what you'd call suburbs. People who choose to live low density areas. Part of it is because of the employers. I, for one, do not like a lot of people around me, and I grew up in a city of > 15M. I like the low density. I think it goes both ways. companies in the bay area choose to headquarter in low density areas (so they can grow).
    - maccard 9y ago
      I wasn’t talking about construction costs, I was talking about density. You can fit more 800sqft houses in a fixed area than you can 2500sqft houses

tehlike 9y ago

Labor is definitely not the main driver. Often quoted construction price is about 300$/sqft around where i live. If you were to build new, you would spend 750k-850k. Now, you cant buy land for less than 1.8 in mountain view that can hold 2500sqft home. And sale price would be close to 3m anyways.

maccard 9y ago
Maybe one of the issues is the expected sizes of homes in the US - 2500 sq ft is about 250 sq m - which is pretty darn big. The average home in the uk is about 85 sq m...
- jdavis703 9y ago
  No, this doesn't have to do with construction costs (which are about linear with square footage), it's other factors. For example, even if someone wanted to build a tiny home (i.e. less than 500 square feet), it's illegal in many places because of minimum square footage requirements. The problem comes from bad land use planning, not because "dumb" Americans don't understand a larger house costs more money.
  - tehlike 9y ago
    True that. There's the other side of the coin though. South bay (excepting San Jose) is what you'd call suburbs. People who choose to live low density areas. Part of it is because of the employers. I, for one, do not like a lot of people around me, and I grew up in a city of > 15M. I like the low density. I think it goes both ways. companies in the bay area choose to headquarter in low density areas (so they can grow).
  - maccard 9y ago
    I wasn’t talking about construction costs, I was talking about density. You can fit more 800sqft houses in a fixed area than you can 2500sqft houses