> What's the policy you want to write that would fix things?
Let's go through them.
> Well, a brick and mortar home isn't as well insulated.
Brick is actually a pretty good insulator. They don't use it because it costs more than what they do use, so that can't be the reason.
> You've also got major appliances that weren't common place a century ago (fridges, washer, dryer, dishwasher, etc), waaaay more lighting, HVAC systems, etc.
Houses literally have had appliances and HVAC systems for a hundred years, and largely modern ones for at least half that long. This doesn't explain why construction costs so much more than it did in the mid-20th century.
> Another not insignificant problem that people are aware of is that all the zoning/permitting also adds significant hidden cost to the process because builders have a lot of downtime waiting for that.
This is where you get into a real issue, but it also has a real solution: Have combined permitting and combined inspections. Don't require separate permits for every part of a new house, have a single permit application for "building a new house" with a single approval.
Also, comb through the regulations and remove the ones that are effectively micromanaging minor trade-offs. Legal prohibitions should be for major safety hazards, not to legally mandate every marginal improvement anybody can come up with for anything which then has to be individually evaluated, inspected and signed off on in every new construction project.
Put all of the marginal improvements into an optional certificate builders can get if buyers demand it -- and if buyers rarely find it to be worth the expense then reevaluate the cost effectiveness of what it takes to get it. The goal is to make sensible trade offs rather than to raise construction costs, right? (Note: The goal may previously have been to intentionally raise construction costs.)