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Zoning and building codes drive up the cost of new construction. The inventory of buildable properties in cities is artificially scarce due to zoning restrictio
by voakbasda 3y ago
Zoning and building codes drive up the cost of new construction. The inventory of buildable properties in cities is artificially scarce due to zoning restrictions, and that scarcity drives up the base cost per square foot. Even with land in hand, you can’t build just anything without meeting an insane number of code requirements, all of which add real costs that drive up the minimum rent amount necessary to provide a positive ROI.
Multistory buildings with running water, electricity, heat, and other “basic” requirements are expensive to engineer and build. No one wants to build something and then lose money, but that’s where we are at with new construction.
Make no mistake, it is entirely the government’s fault. It is illegal everywhere to build something that costs less.
- jethro_tell 3y agoIt's not entirely that it's illegal to build cheaper stuff, it's also that there is no incentive when zoning artificially limits the amount of the market you can serve. Zoning laws like single family zoning, requiring parking spots for every unit or even every bedroom, disallowing zero lot lines on lots that allow multiple units. All of these things add cost that may not pass along any value to people in the market. Aside from the engineering complexities of modern buildings, we've also limited ourselves to building either single family or 200 unit apartments when most cities have a ton of space for 3/4 unit homes which are considerably cheaper to construct. We built our zoning laws on the idea that we could just always expand outward into suburbs forever. But that approach is broken as people start to move back into cities.