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Comment by cjensen | Hacker News Reader

50K isn't that much if we are talking about a development where that cost is spread over dozens of homes. It's possible they just misspoke, but the quote about Chico did not say "per home."

Meanwhile in my home town of Fremont, a developer is putting in hundreds of new homes in North Fremont, and the school district has no way to charge those homes enough to actually build a school for them. The four nearest elementary schools are over-capacity, so the buyers will have the fun of commuting over five miles to school.

Consider the source: the linked article is from a Home Builder Industry magazine.

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>> but the quote about Chico did not say "per home."

And yet the next sentences are:

"Typical fees in San Francisco are $72,600 per home; in Sacramento, they’re $62,000. And for the six California markets highlighted in the Zelman & Associates report, the average is $51,650."

But then it takes them a few more paragraphs to point out that is for a $600k+ house.

Which doesn't make it sound all that bad after all. Particularly when they point out the land itself is about 1/2 the cost.

Not that any of it is good for anyone under 40...

The sale price of the house doesn't matter; it could sell for $100k or $900k, the builder is still out the $50k or more they paid out in fees. Which was most likely passed on to the buyer and I bet the mortgage companies have no complaint.

So what, its probably less than 10%, which is less than the sales taxes on most other things being purchased. We could just as well complain about the profit the builder is making, which is likely a lot more given how much most sub contractors are making.

Its sounds like a big number until you consider the final cost, aka everything is relative, it would be a much bigger deal if the houses were selling for $100k because then it would be 50% of the cost.

Yes, but the whole point is that the fees are part of the reason why the house costs that much. If you wanted the final house to cost $100k, then you'd have to actually build it for $50k. Which may not even be possible, or if it was it would be so tiny that nobody would want it.

They're basically forced to build a (relatively) big expensive house so that the final cost seems reasonable despite the $50k in fees buried in it. Hence why they aren't building entry-level priced houses - they're too cheap to hide the fixed fees.

Fees are like 5-10% of the reason. What's the other 90%?

Edit: there are no entry-level houses because zoned land in places where people want to live in the bay are is more expensive than a lot + house in most other places. There are lots selling for >$500k or some for just as much with tear-down houses on them. That's not due to the fees.

No, they build big houses because rich people can afford it and want it. If people couldn't afford it they'd build smaller houses or townhouses/apartments.

> So what, its probably less than 10%,

If $50k is 10%, that means it's a half million dollar house. That may not be much by comparison to housing stock in California, but there are very few places where that's considered "entry level."

In some states, that $50k is the home price. Or (mandatory Detroit joke) the entire block.

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