4 ms·

Construction isn't easy anymore. we've taxed and regulated it into a luxury.

by dgzl 7y ago

ravenstine 7y ago
Lots of developers choose to build luxury buildings because it can take several years for the construction to be approved. We could build more starter homes like we used to, but it's hardly worth it for developers.
dcolkitt 7y ago
Maybe, but construction may not even be necessary. Shipping containers can now be easily retrofitted into stylish apartments. They can easily be stacked eight stories tall. 95% of the work can be done in overseas factories and is subject to the same globally competitive downward price pressure as every other manufactured good. Build them in Shenzen at a wholesale cost of $30,000 per pod, ship them to San Franciso for $2000, stack and install them at a cost of $8000. At 320 square feet, that's $120 per square foot. The same cost as new homes in rural Texas. All the California legislature needs to do is pass a law zoning everywhere in the state for multi-story shipping container apartments. Then watch prices plummet. Even for single family regular construction homes, because the shipping container apartments will suck so much demand out of the market.
- yocheckitdawg 7y ago
  Who the fuck wants to live in a shipping container?
  - dcolkitt 7y ago
    A shipping container is 320 square feet. Two pods can be joined into a single 740 square foot unit. That's a total cost of $80,000. Let's round to $100,000. Assume a rental yield of 12%. $1000 a month for a brand new 740 square foot apartment in the middle of San Francisco. Plus with modern finishes that are frankly much nicer than anything you'll find in the low-end SF rental market. I'd imagine quite a lot of people would sign up.
    - clucas 7y ago
      I don't think shipping container housing is the panacea the marketing makes it out to be. The savings aren't as crazy as you might think because of all the retrofitting involved to make them pleasant for human occupancy. Square feet are a nice shorthand for certain aspects of habitability, but floor area is not the only relevant factor. This is mostly from an NYT article, so perhaps it's just one school if thought among many, but I found it convincing on the merits. https://www.nytimes.com/2019/08/14/opinion/shipping-container-homes.html https://www.nytimes.com/2019/08/14/opinion/shipping-containe...
    - kube-system 7y ago
      That seems like a lot of money compared to existing prefab options. For the same or less money, why not use something designed to be a dwelling to begin with?
    - patmcc 7y ago
      Why do you think construction price, and not land price, is the limiting factor? I'm in a high-demand city in Canada. The house I'm in right now is worth about $70k. The land it sits on is worth $900k. Shipping containers aren't going to help with that.
      - dcolkitt 7y ago
        It will if you stack them eight stories high. Don't know where you live, but I doubt it's more expensive land than San Francisco, where the average acre of land costs $3.2 million[1]. Taking that acre of land, save half the area for green-space and courtyard. Use half the footprint for shipping containers. Stack the containers 8 high. You now have 242 double-pod units. The amortized land cost per unit is $13,000. Assuming a generous rental yield of 12%, the land cost only adds $130 a month to the rent. That's hardly anything for a 720 square foot apartment. The lesson is that even San Francisco land costs are no match for the power of high-rise high-density housing. [1] https://www.6sqft.com/study-shows-huge-disparity-in-u-s-urban-land-value-with-nyc-making-up-10/ https://www.6sqft.com/study-shows-huge-disparity-in-u-s-urba...
        7y ago
  - dgzl 7y ago
    I know many people who would rather live in a shipping container than where they're currently living.
  - eecc 7y ago
    Well, in Amsterdam students: https://www.studenten.net/artikel/wonen-in-een-container https://www.studenten.net/artikel/wonen-in-een-container
  - throwawaynihil 7y ago
    The kind of people who move to San Francisco from new york or connecticut, or wherever, to get rich then immediately start complaining that San Francisco isn't like wherever it is they immigrated from.
- camjohnson26 7y ago
  I genuinely can’t tell if this is sarcasm or not because there are definitely people with this level of economic illiteracy.
  - dcolkitt 7y ago
    In zoning-restricted markets like the Bay Area, housing supply is extremely price inelastic. The coefficient is at least 2.0 if not higher. If cheap, abundant, shipping containers pull 25% of the demand out of the low-end multi-family segment, that's a 50% drop in prices. Low-end housing is a substitute good with mid-end housing for at least some of the demand. The prime example are people who live with roommates in mid-end housing, who with cheap enough low-end prices, would get their own place. A 50% price shock to low-end multi-family at the very least would pull 10% of the demand out of the mid-end. That would lead to a 20% drop in mid-end multi-family prices. Just the same there's at least some substitutability between mid-end multi-family and mid-to-high-end single family. A prime example are empty-nesters looking to downsize. With a 20% price shock to multi-family, that would suck at least 5% of the demand out of the single-family segment. That's a minimum of a 10% price reduction. Hence a positive supply shock in the form of cheap, abundant shipping container homes would reduce the price of mid-high-end single family homes by at least 10%. This is all micro-econ 101.
    - deleted 7y ago
      [deleted]
- TFortunato 7y ago
  Prefabricated easily moveable homes are already a thing. You can go on https://factorydirectmobilehomes.com/ https://factorydirectmobilehomes.com/ right now and buy a home larger than a shipping container for less than $30k. Modular apartment buildings also exist and can be thrown together quickly and affordably. Not to be rude, but the problem is likely going to take a bit more to solve than throwing shipping containers at it..
- mratzloff 7y ago
  Oh my god. When Hacker News begins literally suggesting the Stacks from Ready Player One as a solution to anything it's time for me to close my browser.

Construction isn't easy anymore. we've taxed and regulated it into a luxury.

by dgzl 7y ago

Construction isn't easy anymore. we've taxed and regulated it into a luxury.

Lots of developers choose to build luxury buildings because it can take several years for the construction to be approved. We could build more starter homes like we used to, but it's hardly worth it for developers.

dcolkitt 7y ago

Maybe, but construction may not even be necessary. Shipping containers can now be easily retrofitted into stylish apartments. They can easily be stacked eight stories tall. 95% of the work can be done in overseas factories and is subject to the same globally competitive downward price pressure as every other manufactured good. Build them in Shenzen at a wholesale cost of $30,000 per pod, ship them to San Franciso for $2000, stack and install them at a cost of $8000. At 320 square feet, that's $120 per square foot. The same cost as new homes in rural Texas. All the California legislature needs to do is pass a law zoning everywhere in the state for multi-story shipping container apartments. Then watch prices plummet. Even for single family regular construction homes, because the shipping container apartments will suck so much demand out of the market.

yocheckitdawg 7y ago
Who the fuck wants to live in a shipping container?
- dcolkitt 7y ago
  A shipping container is 320 square feet. Two pods can be joined into a single 740 square foot unit. That's a total cost of $80,000. Let's round to $100,000. Assume a rental yield of 12%. $1000 a month for a brand new 740 square foot apartment in the middle of San Francisco. Plus with modern finishes that are frankly much nicer than anything you'll find in the low-end SF rental market. I'd imagine quite a lot of people would sign up.
  - clucas 7y ago
    I don't think shipping container housing is the panacea the marketing makes it out to be. The savings aren't as crazy as you might think because of all the retrofitting involved to make them pleasant for human occupancy. Square feet are a nice shorthand for certain aspects of habitability, but floor area is not the only relevant factor. This is mostly from an NYT article, so perhaps it's just one school if thought among many, but I found it convincing on the merits. https://www.nytimes.com/2019/08/14/opinion/shipping-container-homes.html https://www.nytimes.com/2019/08/14/opinion/shipping-containe...
  - kube-system 7y ago
    That seems like a lot of money compared to existing prefab options. For the same or less money, why not use something designed to be a dwelling to begin with?
  - patmcc 7y ago
    Why do you think construction price, and not land price, is the limiting factor? I'm in a high-demand city in Canada. The house I'm in right now is worth about $70k. The land it sits on is worth $900k. Shipping containers aren't going to help with that.
    - dcolkitt 7y ago
      It will if you stack them eight stories high. Don't know where you live, but I doubt it's more expensive land than San Francisco, where the average acre of land costs $3.2 million[1]. Taking that acre of land, save half the area for green-space and courtyard. Use half the footprint for shipping containers. Stack the containers 8 high. You now have 242 double-pod units. The amortized land cost per unit is $13,000. Assuming a generous rental yield of 12%, the land cost only adds $130 a month to the rent. That's hardly anything for a 720 square foot apartment. The lesson is that even San Francisco land costs are no match for the power of high-rise high-density housing. [1] https://www.6sqft.com/study-shows-huge-disparity-in-u-s-urban-land-value-with-nyc-making-up-10/ https://www.6sqft.com/study-shows-huge-disparity-in-u-s-urba...
      - 7y ago
- dgzl 7y ago
  I know many people who would rather live in a shipping container than where they're currently living.
- eecc 7y ago
  Well, in Amsterdam students: https://www.studenten.net/artikel/wonen-in-een-container https://www.studenten.net/artikel/wonen-in-een-container
- throwawaynihil 7y ago
  The kind of people who move to San Francisco from new york or connecticut, or wherever, to get rich then immediately start complaining that San Francisco isn't like wherever it is they immigrated from.
camjohnson26 7y ago
I genuinely can’t tell if this is sarcasm or not because there are definitely people with this level of economic illiteracy.
- dcolkitt 7y ago
  In zoning-restricted markets like the Bay Area, housing supply is extremely price inelastic. The coefficient is at least 2.0 if not higher. If cheap, abundant, shipping containers pull 25% of the demand out of the low-end multi-family segment, that's a 50% drop in prices. Low-end housing is a substitute good with mid-end housing for at least some of the demand. The prime example are people who live with roommates in mid-end housing, who with cheap enough low-end prices, would get their own place. A 50% price shock to low-end multi-family at the very least would pull 10% of the demand out of the mid-end. That would lead to a 20% drop in mid-end multi-family prices. Just the same there's at least some substitutability between mid-end multi-family and mid-to-high-end single family. A prime example are empty-nesters looking to downsize. With a 20% price shock to multi-family, that would suck at least 5% of the demand out of the single-family segment. That's a minimum of a 10% price reduction. Hence a positive supply shock in the form of cheap, abundant shipping container homes would reduce the price of mid-high-end single family homes by at least 10%. This is all micro-econ 101.
  - deleted 7y ago
    [deleted]
TFortunato 7y ago
Prefabricated easily moveable homes are already a thing. You can go on https://factorydirectmobilehomes.com/ https://factorydirectmobilehomes.com/ right now and buy a home larger than a shipping container for less than $30k. Modular apartment buildings also exist and can be thrown together quickly and affordably. Not to be rude, but the problem is likely going to take a bit more to solve than throwing shipping containers at it..
mratzloff 7y ago
Oh my god. When Hacker News begins literally suggesting the Stacks from Ready Player One as a solution to anything it's time for me to close my browser.