4 ms·

I'm not sure people understand how expensive it is to build what we consider a house in the West. Materials are unbelievably expensive and if you go cheap you'r

I'm not sure people understand how expensive it is to build what we consider a house in the West. Materials are unbelievably expensive and if you go cheap you're going to be replacing a lot of them soon. Labor is through the roof expensive. People forget that the average home was ~700 square feet 100 years ago. It's 2400 today. How many people would be willing to put a family of 4 or 5 in a 700 square foot home today? Go to old towns and look at some of the houses that are 100+ years old and 2400 square feet. You know who lived in those homes 100 years ago? Really rich people like lawyers and business execs and they had servants cooking and cleaning. Today that's just expected to be a home for a normal family. We could change what we think a home is for most people but I don't think most people are willing to accept that the home they can afford is closer to a prefabricated trailer than it is a traditional single family home. Even apartments are super expensive to build and the reason you don't see many dwellings that aren't "luxury" is because the cost to construct and maintain them is so high that you'd never get your money back otherwise.

yrgulation 4y ago
Where in the west? In europe we use concrete and bricks, while the us something else. I believe anyone in the construction business will be able to explain that the most expensive part is the land actually. At least in europe. In the uk for instance, the exact same new house, exact same materials, can be 100k GBP less in a cheaper area. Or even half in extreme cases.
- lotsofpulp 4y ago
  It is the same in the US. While labor and materials do cost more, the greatest increase in costs is for the land. But since the US is big, there are huge disparities in land cost. While a laborer or materials might cost 2x or 3x more in a popular area than in an unpopular area, land will be 10x more. Actually, the labor and land costs invert if you go to really unpopular areas, where the land is much cheaper, but no one lives there so labor is much more expensive.
  - yrgulation 4y ago
    “the US is big” Thats what puzzles me. What changed in the dynamics of the american society in such way that new cities are no longer built? I get it in europe there barely and land left to develop, but the us and canada have plenty.
    - lotsofpulp 4y ago
      The adjacent comment by kenned3 addresses this. > Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work. The density that was built 100+ years ago was built pre cars. The cities that are dense are dense because they happened to develop at the right time. Now, everyone in the political process of building a new city is going to question where they are going to have space for large cars, which leads to parking lots, 35ft+ or 10m+ wide streets, and of course quarter acre lots for detached single family homes with garages and driveways. Creating a new Manhattan type region is simply out of the question due to costs. If the nation cannot even do proper upkeep on existing Manhattan, then there is not much chance of digging all the rail tunnels and etc etc for a new Manhattan.
      - yrgulation 4y ago
        See my reply to kenned3. I think the root of this issue is that we are forced to cluster in large cities for access to jobs. I think the way we approach blue collar work is wrong and tech should have solved it by now. There is no reason why we cant move most high end jobs to either small towns or in the proximity of large cities but in areas easily accessible from suburbs. No need for a new manhattan. We need a totally new approach and it must be linked to how we work. I would be very happy to live in a small town, with narrow streets but well organised fast, cheap and reliable public transport, and work either remote or onsite but without the need to commute 2 hours a day total (24 hours of my life each 7 days).
    - kenned3 4y ago
      This is a great conversation as there is so much input from around the world. I can sort of paint the picture of what takes place here (Canada - also a large land mass country). we have a rather large public rail system run by the government (GO Transit: https://www.gotransit.com/en/ https://www.gotransit.com/en/) it is fairly cost effective, modern, and the trains are all new and comfortable. we also have a major problem with a population which seems to refuse to accept they cant afford to live where they want. Everything is about "affordable housing in Toronto", but this is unrealistic. Once i had a conversation at work on this. A younger employee was complaining that he wasnt able to afford a nice house in Toronto and how "unfair" this was. The problem is he was making these comments to 5 others, not one of us lived in Toronto either, as we cant afford it. He refused to commute, and felt he was somehow "entitled" to live where he (and millions of others) want to live. So in short, while the US and Canada have plenty of space, the population doesn't want to live there because the commutes are around an hour each way to work. we also have serious NIMBY issues, where any attempt to increase population density is met with fierce resistance by the local residents who are concerned about their own property values.
- nemo44x 4y ago
  European homes tend to be much smaller than American homes and are very rarely stand alone single family homes. I get to the UK often and almost everything is connected and have small little “gardens”. This is fine and it makes for cheaper construction since there are far less materials and labor is shared across many homes. The hones are tiny by American standards too. We don’t have this as much in the USA. People generally want single family homes that are 2000 square feet+ and 1/5 acre of land. This is a lot of roof, a lot of siding, a lot of timber, a lot of flooring, a foundation, etc. Easily 6-figures in materials and even more for labor, etc. Especially if you go with premium materials. Windows installed are $2k/window. My would cost $70k to install all new, premium windows for example. Premium hardwood quarter-sawn flooring in a 3000 sq foot gone is another $30k, etc. You can start to see how this adds up from $100k+ in materials for trash to many hundred thousand for premium, quality materials.
  - yrgulation 4y ago
    The uk is a bit of an exception. The norm in continental europe is standalone homes and usually much larger. Europe is a diverse continent with varying property size and expectations.
    - nemo44x 4y ago
      The average European home size is nearly 1000 sq-feet (92 square meters) smaller than the average American home being built today. And yes, although there are exceptions and Europe is diverse, multi-family homes are far more common. I'm not saying this is bad - in fact I think America should probably do more of this since it's much cheaper to share resources. But yes, I did some quick research and it appears homes in the UK are among the smallest in Europe. Lots of people on that island I guess. It's no wonder so many of them choose to move to the USA! Here's an interesting graphic: https://www.businessinsider.com/ons-english-homes-are-a-third-of-the-size-of-american-homes-2017-10 https://www.businessinsider.com/ons-english-homes-are-a-thir...
lotsofpulp 4y ago
>Even apartments are super expensive to build and the reason you don't see many dwellings that aren't "luxury" is because the cost to construct and maintain them is so high that you'd never get your money back otherwise. Luxury is just a marketing term. Luxury apartments are the cheapest apartment that are legal to build. Stainless steel appliances and quartz countertops are a rounding error in construction costs. An actual luxurious apartment does not have to call itself a luxury apartment, the price being multiple standard deviations above the mean speaks for itself.
kenned3 4y ago
Well put. Adding to this. The government is always there, with its hands out looking to get a slice of the real-estate market. - Property taxes - Land transfer taxes - Development fees And once you buy your house, any attempt to improve it could trigger more government involvement. Building permits, inspection fees. Your point is spot-on. I think a big part of it is "keeping up with the Joneses". Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work. Lastly - Location is a a major problem. Here (Ontario) the common complaint is "i cant afford to live in Toronto" - Living in Toronto is NOT A RIGHT. No one owes you "affordable housing" in Toronto to avoid a commute. A Lot of people commute on the GO train daily..
rory 4y ago
> People forget that the average home was ~700 square feet 100 years ago. Interesting related graph: https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5 https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5 Although we're currently in a frothy situation, scaled out a bit, it's not clear that housing prices are growing more than general inflation when adjusting for square footage. What _has_ happened is A) houses have gotten bigger and B) people per household has gotten smaller.
- svnpenn 4y ago
  just need to tap the lid, and the froth goes away. problem solved
- nemo44x 4y ago
  I’d love to go back 100+ years on that. Houses were made with better quality materials in many cases, but were much smaller and without things like fancy kitchens and bathrooms.
fleddr 4y ago
Good point. Here in the Netherlands, an ordinary home, which is not an apartment and not even necessarily a fully stand-alone home cost 400K EUR minimum. That's land, material, labor combined. And you'd have a hard time actually building it due to all the shortages in both labor and material. A big part of that 400K is land cost. Land that is typically given out for development by the municipality. It's one of their main revenue streams. So that means you can't make land cheaper without it directly coming at the expense of local taxes. And they're already running deficits even with these high land costs. We have a plan to build an additional 1 million homes in 10 years, but it can't be done due to shortages. The other thing nobody seems to talk about is what happens during an economic downturn. In the aftermath of 2008, almost nothing new got build. After all, why would a commercial developer build something without a buyer? Meanwhile, the demand for housing is still there and growing (population growth), it's just that people are unwilling/unable to step in, temporarily. This piled up backlog is the reason for the current drastic shortage. As is the case for construction workers. All laid off during the downturn, and didn't come back. Guess what will happen during the next economic downturn? Yep. My point: there will be no point of supply meeting demand or even over-supply.

yrgulation 4y ago

Where in the west? In europe we use concrete and bricks, while the us something else. I believe anyone in the construction business will be able to explain that the most expensive part is the land actually. At least in europe. In the uk for instance, the exact same new house, exact same materials, can be 100k GBP less in a cheaper area. Or even half in extreme cases.

lotsofpulp 4y ago
It is the same in the US. While labor and materials do cost more, the greatest increase in costs is for the land. But since the US is big, there are huge disparities in land cost. While a laborer or materials might cost 2x or 3x more in a popular area than in an unpopular area, land will be 10x more. Actually, the labor and land costs invert if you go to really unpopular areas, where the land is much cheaper, but no one lives there so labor is much more expensive.
- yrgulation 4y ago
  “the US is big” Thats what puzzles me. What changed in the dynamics of the american society in such way that new cities are no longer built? I get it in europe there barely and land left to develop, but the us and canada have plenty.
  - lotsofpulp 4y ago
    The adjacent comment by kenned3 addresses this. > Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work. The density that was built 100+ years ago was built pre cars. The cities that are dense are dense because they happened to develop at the right time. Now, everyone in the political process of building a new city is going to question where they are going to have space for large cars, which leads to parking lots, 35ft+ or 10m+ wide streets, and of course quarter acre lots for detached single family homes with garages and driveways. Creating a new Manhattan type region is simply out of the question due to costs. If the nation cannot even do proper upkeep on existing Manhattan, then there is not much chance of digging all the rail tunnels and etc etc for a new Manhattan.
    - yrgulation 4y ago
      See my reply to kenned3. I think the root of this issue is that we are forced to cluster in large cities for access to jobs. I think the way we approach blue collar work is wrong and tech should have solved it by now. There is no reason why we cant move most high end jobs to either small towns or in the proximity of large cities but in areas easily accessible from suburbs. No need for a new manhattan. We need a totally new approach and it must be linked to how we work. I would be very happy to live in a small town, with narrow streets but well organised fast, cheap and reliable public transport, and work either remote or onsite but without the need to commute 2 hours a day total (24 hours of my life each 7 days).
  - kenned3 4y ago
    This is a great conversation as there is so much input from around the world. I can sort of paint the picture of what takes place here (Canada - also a large land mass country). we have a rather large public rail system run by the government (GO Transit: https://www.gotransit.com/en/ https://www.gotransit.com/en/) it is fairly cost effective, modern, and the trains are all new and comfortable. we also have a major problem with a population which seems to refuse to accept they cant afford to live where they want. Everything is about "affordable housing in Toronto", but this is unrealistic. Once i had a conversation at work on this. A younger employee was complaining that he wasnt able to afford a nice house in Toronto and how "unfair" this was. The problem is he was making these comments to 5 others, not one of us lived in Toronto either, as we cant afford it. He refused to commute, and felt he was somehow "entitled" to live where he (and millions of others) want to live. So in short, while the US and Canada have plenty of space, the population doesn't want to live there because the commutes are around an hour each way to work. we also have serious NIMBY issues, where any attempt to increase population density is met with fierce resistance by the local residents who are concerned about their own property values.
nemo44x 4y ago
European homes tend to be much smaller than American homes and are very rarely stand alone single family homes. I get to the UK often and almost everything is connected and have small little “gardens”. This is fine and it makes for cheaper construction since there are far less materials and labor is shared across many homes. The hones are tiny by American standards too. We don’t have this as much in the USA. People generally want single family homes that are 2000 square feet+ and 1/5 acre of land. This is a lot of roof, a lot of siding, a lot of timber, a lot of flooring, a foundation, etc. Easily 6-figures in materials and even more for labor, etc. Especially if you go with premium materials. Windows installed are $2k/window. My would cost $70k to install all new, premium windows for example. Premium hardwood quarter-sawn flooring in a 3000 sq foot gone is another $30k, etc. You can start to see how this adds up from $100k+ in materials for trash to many hundred thousand for premium, quality materials.
- yrgulation 4y ago
  The uk is a bit of an exception. The norm in continental europe is standalone homes and usually much larger. Europe is a diverse continent with varying property size and expectations.
  - nemo44x 4y ago
    The average European home size is nearly 1000 sq-feet (92 square meters) smaller than the average American home being built today. And yes, although there are exceptions and Europe is diverse, multi-family homes are far more common. I'm not saying this is bad - in fact I think America should probably do more of this since it's much cheaper to share resources. But yes, I did some quick research and it appears homes in the UK are among the smallest in Europe. Lots of people on that island I guess. It's no wonder so many of them choose to move to the USA! Here's an interesting graphic: https://www.businessinsider.com/ons-english-homes-are-a-third-of-the-size-of-american-homes-2017-10 https://www.businessinsider.com/ons-english-homes-are-a-thir...

lotsofpulp 4y ago

>Even apartments are super expensive to build and the reason you don't see many dwellings that aren't "luxury" is because the cost to construct and maintain them is so high that you'd never get your money back otherwise. Luxury is just a marketing term. Luxury apartments are the cheapest apartment that are legal to build. Stainless steel appliances and quartz countertops are a rounding error in construction costs. An actual luxurious apartment does not have to call itself a luxury apartment, the price being multiple standard deviations above the mean speaks for itself.

kenned3 4y ago

Well put. Adding to this. The government is always there, with its hands out looking to get a slice of the real-estate market. - Property taxes - Land transfer taxes - Development fees And once you buy your house, any attempt to improve it could trigger more government involvement. Building permits, inspection fees. Your point is spot-on. I think a big part of it is "keeping up with the Joneses". Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work. Lastly - Location is a a major problem. Here (Ontario) the common complaint is "i cant afford to live in Toronto" - Living in Toronto is NOT A RIGHT. No one owes you "affordable housing" in Toronto to avoid a commute. A Lot of people commute on the GO train daily..

rory 4y ago

> People forget that the average home was ~700 square feet 100 years ago. Interesting related graph: https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5 https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5 Although we're currently in a frothy situation, scaled out a bit, it's not clear that housing prices are growing more than general inflation when adjusting for square footage. What _has_ happened is A) houses have gotten bigger and B) people per household has gotten smaller.

svnpenn 4y ago
just need to tap the lid, and the froth goes away. problem solved
nemo44x 4y ago
I’d love to go back 100+ years on that. Houses were made with better quality materials in many cases, but were much smaller and without things like fancy kitchens and bathrooms.

fleddr 4y ago

Good point. Here in the Netherlands, an ordinary home, which is not an apartment and not even necessarily a fully stand-alone home cost 400K EUR minimum. That's land, material, labor combined. And you'd have a hard time actually building it due to all the shortages in both labor and material. A big part of that 400K is land cost. Land that is typically given out for development by the municipality. It's one of their main revenue streams. So that means you can't make land cheaper without it directly coming at the expense of local taxes. And they're already running deficits even with these high land costs. We have a plan to build an additional 1 million homes in 10 years, but it can't be done due to shortages. The other thing nobody seems to talk about is what happens during an economic downturn. In the aftermath of 2008, almost nothing new got build. After all, why would a commercial developer build something without a buyer? Meanwhile, the demand for housing is still there and growing (population growth), it's just that people are unwilling/unable to step in, temporarily. This piled up backlog is the reason for the current drastic shortage. As is the case for construction workers. All laid off during the downturn, and didn't come back. Guess what will happen during the next economic downturn? Yep. My point: there will be no point of supply meeting demand or even over-supply.