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This change will have zero practical effect. The economics of fourplexes and smaller multifamily units do not work. After purchasing the lot and tearing down o
by hardtke 6y ago
This change will have zero practical effect. The economics of fourplexes and smaller multifamily units do not work. After purchasing the lot and tearing down or modifying an existing building, the costs are upwards of $750K per unit, well above the market value of the units. The only hope is that some of the new factory fabricated housing can reduce the costs to make these sorts of buildings feasible. Construction is the one industry where we've seen literally zero productive gains in the last 50 years, and that has become the limiting factor on affordability.
- km3r 6y agoSo why is construction so expensive in bay area? 5000 sq ft McMansions can be built for under 300k elsewhere. Do we have too much regulation? Local labor is too expensive? Too much permitting? A difficult environment to build in (inc. earthquakes)? I also disagree that the economics of fourplexes don't work. If they didn't work at all no one would build them. In addition, just opening up the option for them to be built should not cause any issues, even if it wasn't wildly successful in bring more units to the market.
- djrogers 6y ago> Do we have too much regulation? Local labor is too expensive? Too much permitting? A difficult environment to build in (inc. earthquakes)? Yes. Yes. Yes. And no, not really a factor.
- jahewson 6y agoThis is spot on, as we’ve seen in SF the high cost of construction, due to high labor costs (driven by the high cost of living - catch 22) means that the only way to build without losing money is to build commercial, high-density or luxury property.
- plorkyeran 6y ago$750k is not well above the market value of fourplex units in Berkeley. They're selling for $800-900k these days.