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Comment by ecshafer | Hacker News Reader

I think that more than physics the bottleneck for this is political (at least in the US). All of the local large projects around me are expensive because of massive amounts of red tape (environmental studies, zoning, planning), and political patronage systems. After the kick backs, political donations, promises to only work 8 hours a day, only use union labor, hire x police officers for y hours in overtime security positions a month, use xyz contractor etc. a small cost seems to be the actual labor and materials. Hell these robots if they work will be made illlegal.

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Do you have any evidence or are you just pulling this out of thin air? All sources I can find estimate pre construction costs between 3 and 10% depending on type of infrastructure and where it is (the US according to [1] is on the lower end with 3-5%). To put this in perspective the profit margins on construction projects is 7% according to [2], which also does attribute skilled labour shortages as the main factor behind increasing construction cost.

[1] https://srgexpert.com/wp-content/uploads/2023/07/The-cost-of... [2] https://publications.turnerandtownsend.com/international-con...

Construction costs are not the only costs relating to development and redevelopment. Financing and project risk are also quite significant. Issues that push back the start of construction vastly increase financing costs, and increase construction costs. A delay in getting a permit, or a stop work order because of an environmental lawsuit runs up the interest payments on the loan used to purchase the real estate, as well as increasing the impact of inflation, delaying the revenue, and impacting trades’ schedules, all of which reduce the ROI of the project. These are just some of the issues caused by delays.

But how often do those things actually happen, and is it a substantial enough difference to actually affect the cost of building housing at a fundamental level? Remember that houses have more than tripled in cost this century in most places. A few percent is not going to substantially affect something that has increased in price 340%.

That’s only a 5% rate of return over the last 25 years, which is pretty lackluster. Won’t cover the interest rate on a loan today.

Honestly do you not think what he is saying isn't true?

Do you think they count the items he mentioned in the total costs?

Every major project in America has undocumented costs to go along with the miles of red tape. Just look at California's High Speed Rail.

Where I live they wanted to extend the expressway and it was overwhelmingly supported. So why, 6 years later hasn't it happened? The environmentalist sued to get a survey done that took 2 years to find.... no impact. The county commissioners got voted out and now the new ones want certain promises. The company that got the original no bid contract is owned by a brother of a former commissioner so that led to law suits. People sued because they don't want the new exits to be too close to their house. Others sued because they felt the exits would targets towards higher end homes and didn't equally consider everyone. Then you have the demands that we use ONLY AMERICAN LABOUR!!! and ONLY AMERICAN MATERIALS!!! A state representative said they would boycott the expansion unless a certain percentage of his constitutions were hired to do the work regardless of their qualifications. Another said they would block it due to road noise and complaints from his constitutions unless compensation was made.

It goes on and on and each one costs money they don't count in the official budget.

this stuff needs to be made illegal. If state gives approval to build stuff according to spec, then nobody should be able to block, unless there is major deviation from spec

In many countries that's basically how it works. You file for permission, hand in all the paper work, maybe have a hearing or a period where the public can bring concerns, and once the project is approved it can go ahead and is very difficult to stop. But doing it that way means the approval process now has to capture all the nuances, bloating the process. Big projects go a lot smoother, but small projects nobody would care to object to become more expensive

It's an interesting trade off, and getting the right balance is difficult

That's not red tape. That's politics. Europe is notorious for red tape, yet can do large transit projects for an order of magnitude less cost than America can.

America needs more red tape. Red tape is explicit rules and procedures. In Europe you can make sure your project follows all of the explicit rules and procedures and then you can proceed. Nobody can come and try and stop you because you just say "I followed the rules", and continue.

OTOH in America the rules and procedures aren't explicit. They're embodied in court precedent (like the environmentalist who sued) and in gatekeepers like the county commissioners.

> Every major project in America has undocumented costs to go along with the miles of red tape.

Along with would imply that they are not red tape.

> That's not red tape. That's politics.

That’s literally the definition of red tape! How do politicians have this kind of power to stop the projects? Because there is a county/city/state law that grants them this power. It’s literally part of the procedure! In other words, some part of the process is not defined beyond “the council member has veto power for any construction in their district” (hello NYC!).

As a result, the whole process is not deterministic and ill defined due to red tape.

> In Europe you can make sure your project follows all of the explicit rules and procedures and then you can proceed.

You can in America too, if everything you want to do falls within the current zoning you can build "by right" but the problem is that most projects need a variance here or there, even for something like the type of siding used and that is when all the political negotiation kicks in.

I’m curious if this is an example of survivorship bias though. I don’t have any data, but I can easily imagine lots of projects not getting built at all due to zoning laws or the red tape cost being too high.

I've worked for two companies who would have done business with governments but ended up refusing to do so because the regulatory burdens exceeded the value of the contract.

The first was intel analysis software (DOD contract), and the second was in mental health (medicare and state medicaid contracts). In the first case, they even considered hiring a company who exists solely to help other companies navigate the government procurement process.

> The first was intel analysis software (DOD contract), and the second was in mental health (medicare and state medicaid contracts). In the first case, they even considered hiring a company who exists solely to help other companies navigate the government procurement process.

Indeed. You can get a FedRAMP AWS account pretty easily but I've been told that getting a FedRAMP Moderate environment for production use is a year-long, half-million-dollar project. On top of this you have to continuously deal with the Joint Approval Board (JAB) and Third Party Assessment Organization (3PAO) for any non-trivial changes to information flow or infrastructure. As a kicker the Cost Plus Fixed Fee (CPFF) and Time & Materials (T&M) contracts that are so prevalent in the space mean that your upside is limited and you have to do stuff like get your employees' resumes approved by the government before you can bill for their time.

I don't blame anybody for taking a look at this and saying "not for me".

I work in commercial real estate.

There are massive amounts of monopoly/duopoly interests in construction. Want to build affordable housing? Well if you are taking public dollars, you have to work with certain vendors which are approved and meet certain qualifications. Guess what, only 2 electrical vendors are approved! And so they work together and act as a racket to hold your project hostage unless you meet them on their terms.

Actually had a call today with an exec with one of the largest construction general contractors and this topic of "we can't do XYZ project [e.g. compete in that type of project type... driving costs down through competition] because we hire ABC union labor and it would screw us and our relations with the unions we work with."

Every developer has a war story of getting burned exactly in some way by being beholden to political or labor issues.

This results in higher costs... which ultimately is one of the main issues among others.

  > we hire ABC union labor and it would screw us and our relations with the unions we work with

would maybe an industry-wide union fix that issue?

Doubtful. People get starry eyed at the idea of unions and I get why. Employees need more protection.

But power patterns are the same everywhere and rather than having corrupt corporate bullshit you get corrupt union bullshit. It just might benefit you if you work in the industry and might very much be at the cost of everyone else.

Police unions are the infamous example alongside the teamsters , but almost everyone who’s worked with or for one has stories.

I know someone who works for one and what do you know the people at the top get preferential treatment and there’s all sorts of bullshit going on. It’s still almost certainly better for him but it’s probably not ideal for the projects.

Ignoring cost overruns and hand waving things that fall under “look let’s just let people be people not perfect” you still get a lot of problematic behavior. For example my friend is very good at his job because he was taught by someone very good and as a result has high standards for his work.

This has gotten him targeted because he sets expectations too high which sure feels like a crock of shit.

And that’s just the work related bullshit. There’s still the classics like someone higher up the chain being friends with the right people and throwing others under the bus when they shit the bed.

Yes, police unions are corrupt because police are corrupt. This is not generally the case.

Meh chicken/egg. Giving people organized power is proven over and over again to lead to problems. It’s why we have political science and centuries of “how do we stop everyone from saying fuck it and killing each other”

The police having a state mandated monopoly on violence only adds to the problem but the core issue is still there, and it’s hard to do checks and balances that just don’t erode to either regulatory capture, rampant bureaucracy, over efficient streamlining, or more often than not some mix of all three

It's worth pointing out that these issues vary by the union. As with any type of organization some will be better than others. I don't think being anti-union is the right answer but rather pushing for systemic changes that would curb various problematic behaviors.

When it comes to construction you don't even need to involve unions to find corruption. There's all sorts of corruption (or borderline corruption) surrounding zoning laws in most of the heavily populated places in the US and that's in addition to the blatant political dysfunction.

Sure but I think one of the huge issues is size and the simple fact that the union is by definition NOT pro country/greater good/citizen but pro Union member.

So yea when some CEO golden parachutes out with all the money we’re all rightfully pissed, but people weren’t thrilled with jimmy hoffa or state mandated monopolies that just don’t give a fuck either.

In my city the power company will just tell you to fuck right off no matter what your schedule was for opening your business, no matter how important you are. Hope you can handle your building being built 1+ months behind because “nah fuck you” while the government head makes a million + a year.

Scaling these things so they don’t fall to corruption and graft is very very hard.

In my county the head of the power "company" comes up for election every few years and everything works remarkably well. Still certainly not a perfect system given that as a voter it's quite difficult (just about impossible really) to make a decision between two unknown people. But if things are regularly breaking or overpriced or whatever and there's an absence of meaningful communication from the top it's straightforward to try someone new.

I guess it will be an issue for you if your preference doesn't match the majority of your neighbors who would rather cheaper but lower quality service. But TBF that would be the system working as intended.

That sounds fishy, yes, electricians do need licensing, but as long as they (as in individuals or small companies) have the correct certs, I don't see why you couldn't substitute one with the other.

I work for a home builder. Our single biggest problem is finding and hiring quality contractors that have enough skilled tradesmen.

There are dozens of electrical contractors in my area. But only two that perform work to our standards.

There is only one HVAC company that can meet our standards. Same for all of the other skilled trades.

Our framing crew is the best within a 75 mile radius. Other builders are constantly trying to poach them from us. We keep throwing money at them to prevent them from going to another builder.

Non skilled labor like landscaping and pest control are a dime a dozen. I just fired our main pesticide and herbicide contractor today because they couldn’t get it together.

Of course I had them replaced before I fired them but I had almost 20 options to choose from.

Unfortunately I can’t say the same about all of the skilled contractors.

Well yeah you've practically done the same thing that's been done with software where juniors need education plus three years of experience for their first job so you have no juniors.

I think the difference is that the pipelines for becoming a junior software developer are well-documented online, where the pipeline for being a "Junior Developer" in the trades is generally accomplished by calling and walking into places and asking for a job still.

Not accurate, even slightly. You might get hired as a gopher and spend 5 years trying to do other work if you just blunder in without training or skills.

Now, there are certificates and other training that most places expect for blue collar workers starting as apprentices.

The days of walking off the street to get an apprenticeship in the trades is over. You'll get one after proving you're not on drugs, can show up, and are willing to do bullshit jobs for minimum wage for a three to five years beforehand.

nah, i went from apprentice to lead installer in under 3 years, there is full training programs for the trades, but you will most likely get injured out before retirement so a lot of people won't even go that route. Until the trades are capped at 30 hours a week, you're going to injure out most of your workforce.

It is really hard on bodies.

The HN crowd sure has some well informed opinions about people who work for a living.

Many of us do the same. I'd say most. Millionaire founders past exit are not the majority of the HN crowd by a long shot.

Uh no. Our culture and society have told folks to go to college for so long like it’s their only chance for success.

I put on a tool belt as a kid because I didn’t have the opportunity to go to school. It was either learn a trade or fail into the pit of despair that is the hospitality industry.

I’m in the south so we don’t have the benefits of union training.

A union carpenter with one year of on the job training will run circles around a veteran carpenter from the south with 15-20 years of experience who never had access to such training.

> A union carpenter with one year of on the job training will run circles around a veteran carpenter from the south with 15-20 years of experience who never had access to such training.

Can you elaborate on this point? What is it about the union that makes their on the job training so effective? Veteran carpenters with 15-20 yrs of exp have, in general, a very strong skill set -- what is the union doing that makes people catch up so fast? And if that's true, why do more people not defect from the union?

The contractor is supposed to train their tradesmen. There's no hypocrisy in insisting on good contractors.

How in the world general contractor can train tradesmen? Contractor organizes and manages, every particular tradesman is better in their respective field than contractor.

A good contractor will recognize new employees with potential and try to point them in the right direction and give them guidance.

My first construction job ever was in the Caribbean. I got placed with a group of Haitians, and we were all laborers. We never had a tool in our hands. We simply carried materials, loaded things onto the roof, set up scaffolding, etc.

On my third day on the job, the leader of the Haitians became angry at me and kept telling me to slow down. I kept pushing and the lead carpenter on the job noticed. The next day, the general contractor (my boss) pulled me aside and said "when you come in on Monday, make sure you have a tool belt, a hammer, a pencil, a speed square, a tape measure, and a razor blade."

I showed up that Monday with all of the required tools and the GC let me work alongside the lead carpenter. At the end of that first week, the lead carpenter lent me a book that he used to learned carpentry while he was in a union in Wisconsin. I spent all weekend reading that book and I had tons of questions for him when I returned to work the next week.

I never looked back. I have since worked professionally in every single residential construction related trade. I am confident that I can perform each trade at a professional level with the exception of welding. I can weld. I welded everything on my Land Cruiser and I've welded scores of hip plates over the years. But I'm not confident enough to say that I could perform at the same level as a good professional welder.

But HVAC, electrical, plumbing, roofing, siding, millwork installation, finish carpentry, landscaping, and irrigation are all things that I can perform at a top level.

That lead carpenter ended up being my best friend I have ever had and he taught me about a lot more than carpentry.

They weren't talking about general contractors, but trade-specific contractors with multiple tradesmen working together. A crew can supervise and train newer members, and the more senior tradesmen can make sure the output of the entire crew is high quality even though some of them have a lot to learn.

Even for the explicit goal of getting juniors trained, the crew that does the better job is probably doing more training than the worse crew.

I doubt you meant it this way, but that last bit hits a little rough. It's good that you are able to hire people when you have vacancies, and it's good that you don't have to be at the mercy of some insane rent-seeking because one crew in town has managed to monopolize one of your inputs.

But saying it's unfortunate that you can't just whack anyone at will with 20 people lined up behind them jobless is wishing for a pretty bad situation right? If all your positions were filled by someone with 20 jobless people standing behind them, who would buy the homes you build?

I'm not sure what's it like in the GP's area, but here I'm happy there are landscapers and other contractors who aren't part of the builders teams. There's lack of people available for odd jobs and for example it was hard to find a painter who wasn't busy with new houses. Unless it's a pathological situation on the market, those people are not idle/jobless. There needs to be a good mix of both.

I’m guessing you’ve never hired a general contractor, or any other kind of home contractor for that matter? I’ve hired over a dozen at this point in the 1.5 years of owning my home, and I’d say, of those, about 2 have been any good. The construction and contracting landscape is a trash heap - a straight race to the bottom filled with lies, shoddy workmanship, and illegal labor. I’m suing 2 of mine for bad workmanship/abandoned projects. I do 100% of my own home renovations now, regardless of the cost of time, tools or materials.

If 2 have been good why not stick with them?

Because my stone mason, as good as he is, doesn’t do plumbing.

His recommendations weren’t good? Often good tradespeople know other good tradespeople.

Like the parent, I haven't found that's true at all. Most people doing residential work on houses work either on their own or in very small teams. They spend their time working on houses, not networking with other tradespeople. They might have a few people they work with regularly, but it's not a deep network.

Much better is local whatsapp groups where people who've hired good people can make recommendations. Those are a trove of good information.

You could ask what plumber that stone mason uses. "Good people like working with good people" etc.

I have tried exactly this, and it does not work. Nobody who did direct work ever had recommendations for peer workers. They just don't care. Most subs work directly with generals and not each other that much.

The general contractors know which subs are (currently) good and bad, so their recs are good, but you have to be friendly with them for them to share (instead of taking the project on themselves).

Ah, that's a shame :/

Worked for me, bathroom guy recommended a carpenter that turned out great. Was hoping it was a general thing one could do.

Professionals trade favors for each other. Someone who has done good work for a peer won't necessarily do good work if hired by some rando.

The original guy’s rep is on the line for making the referral, so if there is already a relationship, he will want to rec someone who will do good work.

I'll second that finding a good contractor (or even just a "handy man") as a home owner is very hard. When i moved into my house we had two bathrooms and the kitchen renovated. Not a single piece of plumbing the original contractors touched has made it past 3 years, it's all been replaced. About the only thing that was done correctly was bathroom tile. On the other hand, on my street my neighbors and I have a good hvac guy. They are treated like royalty in my neighborhood because they show up, know what they're doing, and fair.

my father in law who has passed away ran a little independent hvac shop. Just him and another guy, they had more work than they could ever handle and he could have grown to at least a 10-15 person shop but chose to work by himself. In southern US climates HVAC is def. a career option, however it's hard physical work that will slowly destroy your body. heh Not unlike how SWE is hard mental work that can slowly destroy your mind.

edit: i miss my father-in-law very much, he could do anything. he replaced the floor in a pier and beam house while living in it. Just think about that for a moment, how do you replace a floor? that's what holds up the walls and the walls hold up the roof...

Finding people is easy. Finding good ones is hard. You basically have to interview them. Even then you can end up with a slick salesman and garbage crew.

Needed a moving company. One guy shows up sits in my driveway gives me a quote. The next guy walked thru the house and gave me a quote. The third guy shows up opens every closet every cabinet and has a fairly spot on estimate. The first two were off by nearly 30% on weight/cost.

Needed someone to paint the entire interior of a house. One guy pulls a no show on the walkthru and then 3 months latter says I didnt show on time that day (it was already a done job at that point). Second guy goes 'hmm duno maybe X price'. Next guy measures everything has a itemized estimate. I hired the one with the good estimate.

My sister needed some simple electrical work done. 2 guys just handed her a number and an open ended contract. The 3rd guy had an itemized estimate that was lower than the first two because he did the prework.

Had some AC work done. Again with the 3. 1 just random didnt even come out, 1 driveway guy, and 1 who actually looked around and figured it out correctly. Even then I walk out there and the outside unit is installed backwards. I tell them, they puff out on me. I grab the foreman and walk him over with a 'uh there is a small issue here' didnt tell him what. They had to redo 3 hours of work once the foreman saw it backwards. All because the guys he had were willing to do backwards work. The foreman is usually the key. If they give a crap it will be done right.

Trying to have a covered porch added to my current house. So far 2 no shows and totally ghosted.

I wish this was atypical. But it isn't. I have many more.

I always go back to our real estate agent to find contractors. We've never had any issues with the ones she's recommended.

And how did you get your real estate agent???

The real answer behind the scenes: commercial pays better for the same work.

Any competent tradesperson is doing majority commercial.

Ergo, if you’re looking for residential, you get…

The post doesn't mean there are 20 unemployed people, but that there are 20 interchangable pest control contractors who all do an adequate job, and so the one they fired was easy to replace.

We are at the mercy of one crew. Over 150+ jobs in my company are all at the mercy of that one framing crew that has ~30 people. If we lose them, we'd have to scramble like crazy to find a replacement.

I have guys in Brownsville, TX that I could fly in and put up in hotels to get us through a tough spot, but that would cost a lot of money. And I'd love to encourage them to all move up here to Alabama with their families, but the current political climate has them afraid to do so.

Edit: I'm not saying I wish I could fire anyone I want at any time. I'm saying that it stinks that I literally have no other options for the other trades. So I'm forced to stick with the subpar options.

Appreciate you highlighting the need for unions. Hopefully the skilled trades shortage persists indefinitely, otherwise they’d be treated just as you mentioned: disposable and interchangeable. The scarcity is the only thing protecting these folks at the moment.

https://www.jchs.harvard.edu/blog/rebuilding-construction-tr...

There is so much work for skilled tradesmen that they would rather see more automation so they can take more jobs. Even many unions, e.g. carpenters' unions, think this way.

I mean no large group is a monolith so I'm sure one can find opinions either way among tradesmen. But IMO the problem is so big that it's no longer revenue maximizing for anyone, even the workers. By some measures productivity has actually been declining for construction. If that was good for workers then we should just set them to digging a second Panama Canal with spoons.

Real men would dig Route 66 canal instead of Panama.

Software engineers have recently had a chance to taste how does it feel to be plentiful and disposable, after decades of shortage.

Scarcity also creates automation and efficiency pressure. You either get more of that human resource, or you make it so you use less of it, productivity increases also allow for the resources used to make more money without increasing project costs. This is also a very boom/bust industry, so the 2008 bust washed a lot of people out, especially juniors who would be experienced seniors today. A union is not going to protect labor from a building bust, they will stop hiring and the pipeline stalls.

There is a housing shortage of between 3.5M and 12M units; there will be no bust for at least the next decade, as housing production rate dropped substantially after the 2008 global financial crisis and did not recover.

(typically, union workers go on unemployment during slow periods; this includes electrical linemen/journeymen, automotive, pipe fitters, etc based on first hand conversations with union tradespeople in my examples)

Housing Supply and Housing Affordability - https://www.nber.org/papers/w33694 - April 2025

The Housing Industry Never Recovered From the Great Recession - https://prospect.org/infrastructure/housing/2024-12-11-housi... - December 11, 2024

APM Marketplace: In an uncertain housing market, home builders face a range of challenges - https://www.marketplace.org/story/2024/11/26/in-an-uncertain... - November 26, 2024

U.S. Housing Shortage: Everything, Everywhere, All at Once - https://www.fanniemae.com/research-and-insights/perspectives... - October 31st, 2022

Fannie Mae: The U.S. Housing Shortage from a Local Perspective - https://www.fanniemae.com/media/45106/display - October 2022

> There is a housing shortage of between 3.5M and 12M units;

The problem with this stat is that the historic data does not support it:

https://fred.stlouisfed.org/series/RSAHORUSQ156S

The supply is just fine, more so with a declining population, how we use housing has changed dramatically.

https://www.census.gov/library/stories/2023/06/more-than-a-q...

U.S. Housing Shortage: Everything, Everywhere, All at Once: that you called out states "While the United States does indeed have a national shortage of affordable housing, every state and city's path to addressing it is relatively unique, and the tools and tactics used to create badly needed new housing supply will have to be tailored."

This is a gross understatement of the issue. The problem is voters. No one will vote in more housing, housing benefits for others or more affordable housing. Because the people who vote own homes and go into the voting booth and protect their own interests and assets: https://www.route-fifty.com/management/2022/08/problem-homeo... . There isnt a law about having to be a landholder to vote but there is a very strong correlation between the two.

Planing and zoning is hyper local, hyper political and very active. This is why mixed use zoning is harder to find, you can't run a garage out of your garage. The is why the "missing middle" is a thing in America. This is why "corporate ownership" of housing wont get fixed (it is a hyper local issue and the people who would show up to vote against it are the same ones whos property prices are being propped up by it).

>> people are bad at their jobs so I fire them

> need for unions

What in the world? This is the exact opposite use case for unions.

Unions help protect workers from single, dominant/ monopolistic employers where workers have no other options and can get taken advantage of. The construction industry is nearly the polar opposite, where there is almost no barrier for entry and the employment space is very competitive, including the ability to start your own business.

Construction unions would be an absolute nightmare.

Construction unions do great across European countries.

Any company that can take advantage of workers will do it, no need for "dominant/ monopolistic".

There is a reason why security measures that put the workers life at risk are almost nonexistent on countries where unions hardly have a presence.

No helmets, no eye protection, no masks when dealing with chemicals, bending metal bars with bare hands, no protection shoes, hopping into a ladder alone,....

Some examples of what I have seen in practice.

>Construction unions do great across European countries.

Do not know about your country - but over here the construction sites are full of people who couldn't even write the word union (mostly Asian countries like Philippines, Nepal, etc.)

Germany, and yes if I go to southern countries, Portugal my home country, alongside the other ones, there is a certain flexibility between the law, unions, and what actually happens at the construction site, unless someone does a complaint to the respective goverment authority responsible for checking worker conditions.

I can also add that Scadinavian countries, and UK tend to be similar to Germany.

Naturally all of them have black sheeps that ignore good work conditions if they can manage to, that is why work inspections are also a thing.

I mean what happens is skilled workers from poorer countries (Croatia in my case) move to richer EU countries, then we have nobody to perform construction - and now we have issued work Visas for 5% of the population basically. And you see newspaper stories of these people basically being treated like slave labor (crammed in small apartments, completely dependent on the visa provider, often abused). Just a few days ago there was another story about an immigrant worker being raped by her employer - also an immigrant that was just done serving his previous rape sentence. And plenty of stories of these people not being paid for months, documents being held, etc.

The unions have no standing because theres nobody left to be a part of the union - most people already left for Germany/Switzerland/etc. So Germany is just riding on the EU migration for now - but considering population dynamics - that's a short wave.

I wish NYC could suck out cheaper construction labour from the likes of Missisippi, maybe Second Avenue Subway could actually be built on time and on budget in that case. Right now, expensive local labour has the city by the balls

> Any company that can take advantage of workers will do it, no need for "dominant/ monopolistic".

What a nonsense thing to say. This is not an opinion most people, and certainly not most economists, would agree with. It's a foundational pillar of regulated free markets.

Moreover in this instance, construction companies are not some sprawling international megacorps, they're locally oowned and operated.

A pillar of free-market models, sure. But economics is built on a stack of spherical-cow assumptions that don’t really hold up in the real world.

Of course an employee theoretically has total freedom to leave an abusive employer and go somewhere else. But do they have time to search for jobs while working full-time? What if their employer makes them work mandatory overtime? If they don’t have time to search while working, can they afford to be unemployed for a few months? What if their employer threatens them or discourages other employers in the area from hiring them?

It would be great if competition made unions unnecessary, but it doesn’t.

> What in the world? This is the exact opposite use case for unions.

Trade unions tend to have a large focus on training and skill building. Yes they make firing people harder but the flip side of unions can be increasing the average quality such that firing due to quality or skill is less often necessary.

If I have need 10 people and I have a choice between two looks. Pool A is harder to fire and costs more but has a 95% competence rate. Pool B is easy to fire and costs less but has a 70% competence rate.

Setting any contractual rules aside I’m going g to find myself firing from pool B more often, and it is easy to attribute all of that to the rules that make A harder to fire. They are easier to fire (component of variance), they are more likely to be bad (component 2), and because they are easier to fire in going to be more likely to fire than coach for quality (component 3).

as a home owner, i don't want any barrier to demanding someone never step foot in my house again.

> Construction unions would be an absolute nightmare.

They seem to work fine.

https://nabtu.org/

https://www.liuna.org/

https://www.carpenters.org/

https://ibew.org/

Framing is skilled, but landscaping and pest control are unskilled? Are you living in a well framed house overrun with mice and a terrible yard? I've done some framing. With a communicative foreman and a straightforward building design I did not find it that hard.

If performing quality framing was so easy, I imagine I’d have less trouble finding folks who want to earn $125k+ per year to do it for me.

Instead I just have a group of ~30 Guatemalans who do it while I listen to my American friends and neighbors complain about immigrants “taking all the jobs.”

Folks may not know about the jobs, or there might be other details that aren’t mentioned here that make them less interested, for example are there occasionally big chunks of being unemployed, is the work dangerous, is the work stable, etc.

20 years ago, before I started making good money as a software engineer, if someone had offered me a similar opportunity, and training, I would’ve taken it assuming there were no big gotchas.

>Non skilled labor like landscaping and pest control are a dime a dozen.

As a former landscaper, I can tell you that you either aren't taking the time to understand at least one of these professions at all, or simply have some very low standards for good landscaping. It is not a dime-a-dozen field that requires minimal skill, at all, and given all I've seen of GOOD pest control, the same applies, fully. You might have dozens of small contractors out there claiming to be either of these things but knowing little, sure, but those that actually know the technical balances at work and can apply those to what they're doing so that it creates durable results for your building/land/home, are people who need to know quite a few very fine nuances of their work.

I mean, unless you think that constructing external landscapes that soon collapse, flood or fill with dead plants is irrelevant, or have no problem living in a building riddled with rats, mice, cockroaches and easy domicile to all of these pests and sundry.

I'm a layperson and this touches on my greatest fear about hiring contractors, that I'm not able to quickly enough determine who does meet the quality standard or even what the quality standard should be for a given job. How are average people supposed to navigate these things? I suppose I would just ask Claude/ChatGPT these days but there is surely a lot of tribal knowledge that they don't have.

And chatgpt is going to pull the data from an random UK website when you are in the US and vice-versa, and will augment it with knowledge from its model that come from a reddit thread from 2010 written by an italian plumber.

I saw that on the DIY Uk subreddit where people were confused because ChatGPT was answering question using american standards. It's really hard to answer questions based on regional tribal knowledge.

Apparently a good source are the tradesmens shop? THey might know their customers? Word-of-mouth?

poor prompting then. One should narrow down the question to the particular circumstance it should apply.

this is exactly what you can’t do as an amateur though. You don’t know enough context to provide your relevant circumstances.

Well no, not really. I’m replying in the context of the parent comment, that was painting a scenario where the GPT would reply with information relevant to different countries.

It doesn’t need to be advanced prompting, it’s enough to provide enough information and ask to “provide advice relevant to the current and applicable codes and regulations”

It’s the first question a forum dweller would reply to a poorly articulated post.

And how would the LLM know that a comment in english in a random forum is applicable to a specific country but not another?

UK, US, Australia all have different rules and regulations, but their websites don't exactly advertise their location. It is implied that you visit them based on your country. The UK has a weird mix of metric and imperial, so you can't even use the units to figure it out!! It's not always easy to figure it out, even for a human.

I think you're exaggerating. There are several ways an LLM can discern the applicability of certain data to a context (document metadata such as TLD, cross check with applicable authoritative codes and regulations, be wary of random forum posts.)

I'm pretty sure an LLM can provide pretty refined answers given some reasonable context. i.e. I want to rewire a socked in my apartment, which is in London, UK. What do I need to do?

The most basic thing you do is hiring by referral, you talk to your friends and neighbors about contractors they used, and then hire the ones that were recommended, being ready to slightly overpay or wait for the slot.

This. I live in a very different place from you and I'm just a humble homeowner, but contractors here are less than competent and I as a layperson can often do better after reading up on the thing and watching a couple Youtube videos.

I know it's meme tier and horrible when a guy who watched some videos tells the tradesmen how to do their jobs, but unfortunately I often end up being right and prove them wrong.

For example one of the last things I experienced was one of the electricians needed to get a cable through the concrete upper floor, and just couldn't do the calculations on where to drill and ended up drilling into the middle of the wall instead of right next to it.

These kinds of fuckups are constant and the contractors are pretty good at hiding these unless I stand next to them.

I've yet to meet a roofer that could properly do trig to calculate the sloped roof area.

....There's no trigonometry in common roof-slope-area calculations and designations, only pythagoreans. Rise over run, 6ft for every 12ft, etc.

I do feel your pain about vetting "professionals", especially living in a place that tries to prevent me from making my own improvements.

Arent sloped roofs just rectangles?

The intersections of the joists/beams and the rafters require you to cut angled cuts on the rafters to sit appropriately on the joists/beams.

See: https://www.structuralbasics.com/rafter-roof-design/ and imagine how you would get a rectangular piece of wood for the rafter to sit flush against the rectangular joists/beams.

OK there might be some confusion here on what's meant by "roofer." Roofers as I have always seen the term used means the crew that puts the shingles on.

The roof structure is built by carpenters or framers. Or more likely just delivered as pre-built trusses which are placed on top of the walls.

For a roof built on-site, a speed-square or framing square will include markings for common roofing cuts, hip/valley cuts, etc. You have to know how to use them but you don't really need to understand the underlying trigonometry.

> a layperson can often do better

I think it's a mixed bag. I've purchased homes where the previous owner thought they were a wizard at home improvement. One apt example is a dryer outlet that was converted from 14-30R to 10-30R because the homeowner googled the wrong thing and went down a bad rabbit hole. A good electrician would tell you to change the cord on your dryer and that anything else is a code violation.

>A good electrician would tell you to change the cord on your dryer and that anything else is a code violation.

It would be a code violation for me to take my exiting 120yo retaining wall and extend it by copying it in exact detail despite the fact that the details of its construction are provably satisfactory.

The code isn't there to ensure results. The code is there to make the subjective quantifiable so it can be bickered over and litigated in a fairly deterministic manner.

> provably satisfactory.

I don't think the chassis of my dryer becoming energized is a provably satisfactory outcome.

I agree that a lot of code amounts to bureaucratic nonsense, but many rules were changed over time for good reason.

Everything sounds like a good reason in a vacuum. I could write an equivalent appeal to emotion justifying why retaining walls ought to be engineered but the fact of the matter is that a bunch of barely literate people working from reference tables managed to do fine and copying them probably will do fine too.

How did ground fault protection not kick in when you touched it?

Yes agreed. There's skill and experience - and then there's... common sense? And some folks just don't have it.

> I as a layperson can often do bette

Except often times you can't because of all the regulations. First there's the code which you can't possibly understand sufficiently if it's not your day job. If you do figure out what you need to do you'll then find plenty of things you can't do without a license that you need to put in years for, not just pay and pass a test.

The only stuff that's not subject to exclusionary regulation is the "average homeowner" type renovation stuff and even then only because there isn't political will to tolerate it, not because the government and trades wouldn't try if they could.

But what do I know, I'm just someone who's been told he has to pay for $50k of engineering studies to assess the runoff impacts of converting forested former pasture back to the latter because a bunch of useful idiots 40yr ago heard some politicians talking points and thought it sounded good.

> First there's the code which you can't possibly understand sufficiently if it's not your day job.

Some of the stuff I found from contractors who worked on my house demonstrate that it turns out people whose day job is understanding the code also don't.

> I know it's meme tier and horrible when a guy who watched some videos tells the tradesmen how to do their jobs, but unfortunately I often end up being right and prove them wrong.

Normalization of deviance is becoming common place. There's a lot to unpack here but there is a severe lack of professionalism, responsibility, genuine knowledge, and experience. Now its just a bunch of greedy man children who live by "fake it till you make it" and use every dirty trick to intimidate and mislead the client. Once they secure the job they barely show up to the the job site because they ran off to play with their golf clubs, sports cars and yachts or whatever while a crew of cheap unskilled labor shits all over the job site. And if you call out these morons and challenge them they get angry and defensive because they're the experts and you're a dumb client. Infuriating hubris.

>> For example one of the last things I experienced was one of the electricians needed to get a cable through the concrete upper floor, and just couldn't do the calculations on where to drill and ended up drilling into the middle of the wall instead of right next to it.

The exact same problem exists for small manufacturers in the US. There are lot of people who believe they should have jobs in skilled trades and check some boxes but are missing fundamentals.

This is a little bit tangential to the conversation but I was wondering how you find the best skilled contractors? Do you use Google maps like everyone else and look at the ratings? Or is it information you glean by trial and error over time? Or do you check in with trade schools to see who their best graduates are? Or perhaps something that I haven't mentioned?

For me it’s personal references from other people via local Facebook/whatsapp groups - since I have kids that’s almost always parent groups

Mostly from people at supply houses and lumber yards. They know how to tell if a contractor is good or not.

Or if we catch wind of a good contractor doing great work for another builder, we'll go inspect their work and then try to get them to jump ship and work with us.

Trade school information won't help us any because we're hiring contracting companies. We don't hire individuals unless it's for something specific that can be handled by one individual like kitchen installs.

Highly skilled tradesmen are often like really good lawyers. Just because they're good at their craft doesn't mean they'll necessarily be good at running their own contracting business (or law firm).

So being a successful contractor really boils down to being able to properly manage your skilled labor (and keep them content) while also keeping things on budget and following the critical path.

The single most common mistake I see with most contractors (and most all small business owners in general) is the fact that they think "hey, I own this business, therefore I should be the highest paid person here." So they don't take care of their labor and they end up losing them to someone who will take better care of them.

They think that they own the business so they must provide the most value to the company and should earn the most. That's rarely the case in real life though.

When I was a contractor out on my own, there were plenty of times when I was paying some of my employees more than I ever took home. The President of the company I work for now isn't the highest compensated member of our team.

Is this a symptom of every teacher and parent telling kids to get college degrees?

A lot of this is a result of how trade licensing works.

In most states it's not about whether you know how to do something -- you can't just take a licensing exam and get a license even if you know the material -- it's about having access to someone who already has a license to sign off on you. From which you get two consequences.

First, if you know someone who already has a license but doesn't know what they're doing or isn't a good teacher, they sign off on other people without actually teaching them how to do a good job, and then you get even more people with a license who don't really know how to do the job.

And second, because the existing license holder has to sign off on several years worth of hours for someone new to get a license, you deter people who would do a good job but -- because of that -- have more opportunities in other industries where you don't have to spend a large chunk of your adult life beholden to someone else because it's still prohibited by law for you to strike out on your own, in an industry that people would otherwise want to enter because they want to do exactly that. Which both lowers the average quality of the candidate pool and creates shortages by lowering the number of candidates.

Do you have any advice for how homeowners can screen tradesmen?

Go to the lumber yards and supply houses. Go to the sales counter and ask who they would recommend for a certain job.

Where I am it's $90,000 - $240,000 to subdivide land from one to two.

Not including costs post-subdividing like selling the empty lot and tax's.

Obviously the new buyer has building costs, but you might have to demolish the existing house to divide, good chance it was in the middle.

On top of all this is the years to divide the property.

On top of all this you can't then build what you want on the new property.

On top of all this is the years to build on the empty lots.

These all have a $$$ cost.

$240,000 to quickly divide and rebuild high density, no one would care about that cost, that's ~$0.

So the houses you can end up with can't be tight practical buildings, it's $$$$$ for permits and land and time. So this robot will help build mega mansions for single families.

You need look no further than the poster child of red tape delayed construction projects: California High Speed Rail.

https://www.nytimes.com/2025/05/04/us/high-speed-rail-califo...

That 7% is for the projects that actually happen. This misses all the projects that don’t when start because they don’t pencil due to the phenomenon that the original poster mentioned.

If you want to see it up close and personal, go to any Public Hearing in your city for any new construction of any kind, and watch 100 of your neighbours who have already benefitted from past construction lineup to oppose the prospect of any additional construction for anyone else. It’s not just that it adds a few percent costs, it’s that it drastically reduces the number of projects people even try to build.

In the US, it’s vastly different. Just look at Ryan Homes.

> promises to only work 8 hours a day, only use union labor, hire x police officers for y hours in overtime security positions a month, use xyz contractor etc.

Those are not pre-construction costs are they? Massive differences in labor costs described there.

I have myself physically tried to build housing and can confirm that this is definitely the case.

Zoning is probably the single biggest block to affordable housing in this country.

I was raised in a construction friendly household, I have the ability to build housing. I saw there was empty land in my city that could nicely fit about 5 houses on it (it was a 5-acre plot). I noticed that housing had become extremely expensive in my city and thought well heck why not try to be the change I want to see in the world and try to increase the housing supply.

Problem was that my 5-acre plot was zoned as “single family” which meant that I was legally allowed to build 1 house on it and not 5. So I tried to get the plot rezoned to a classification that allowed more than one house. Had to pay an engineer over 50k to create a plan for the city that was acceptable, including environmental impact study and drainage plans.

The zoning board committee said they would approve 2 houses to be built on the site but didn’t want to allow more because they were worried there wasn’t enough public transport available in the area (even though each planned house would have its own garage and road access). And literally I’m not kidding one of the members even mentioned that he was worried about this zoning change being motivated by a desire to (in his words): “enrich yourself”.

There are so many bureaucratic barriers to building housing in the US. Zoning is just one layer of bureaucracy that can be tens of thousands of dollars and years of back-and-forth with the city. There are even more layers with their own set of costs. Trying to actually build something is a radicalizing experience. It really feels the system is set up to intentionally limit supply and slow people down.

I think this is true, but even after a construction company works through all the approvals the sheer cost of construction is insurmountable. A big part of this is obviously (sometimes union) labor. This happened recently in NIMBY-HQ Berkeley as interest rates crept up [1]. Pre-approved construction sites are sitting empty.

I am off the (not so controversial) opinion that labor should be paid fair wages, but I think it's also fair to use tech like this to multiply labor productivity.

The last piece is the cost of raw materials, which has also ballooned.

[1]: https://www.berkeleyside.org/2025/04/04/berkeley-housing-dow...

> A big part of this is obviously (union) labor

I live in Wyoming. We don’t have many unions. The cost scourge is still there due to red tape and general fuckery.

Red or blue, those who own property own the levers of power to determine what gets built.

I’ve yet to meet anyone who thinks utterly stifling construction restrictions are a good thing, yet they seem to exist everywhere.

Unions don't help but in most casese they are a tiny problem. The real question is which red tape is really there for good reason.

In the best case they certainly would help workers be able to afford the homes they built though. My friend was telling me today that his grandfather came out to California to work as a farm hand, and used that income to buy a home in the area. Imagine doing so now.

I really wish people would be more specific when they complain about "red tape." I think a lot of people just use red tape as a generalization that means "every government rule and formality that I don't like." Exactly which "red tape" is adding how much cost to projects? Arguers should enumerate them and explain why each cost is unnecessary.

That is a lot of work. It is easy to complain about 'red tape', but ever single line is there for a reason. So the real arguement is what isn't good enough to be worth the cost. I don't want a building to fall, but I also don't want inspectors to insists on additional bracing where the isn't even a stress point (which I have seen)

You wrote this in a separate comment: "There is a well-documented cost premium to building in America that isn’t explained by complexity or wages."

I am fairly confident that Europe has a lot more red tape than Wyoming. Yet it's considerably cheaper to build large projects in Europe.

Correct. My point is this isn't caused by labour unions.

> Europe has a lot more red tape than Wyoming

In general that's true, but perhaps not when it comes to construction, especially for large public projects. In Europe, the goal of such projects appears to be to complete the project and have the thing that they're building. In the US, at least as of late, it seems like the goal is to pay various interest groups in money or patronage, and whether the thing gets built or not is only of a secondary significance.

How much capability do European governments have to perform/construct or closely monitor these projects?

I have a theory that in-house expertise is cheaper in the long run.

My university has an auto shop for this very reason - at a certain size, it makes more sense to care for your own fleet than it does to contract it out, even though the auto fleet peeps have approximately zero overlap with educational goals.

I found this interesting:

https://www.chicagobooth.edu/review/us-construction-has-prod...

More than just red-tape there's whitecollar processes in pre-construction that take months. Just estimating the cost of each subtrade is a process currently done by hand on blueprints (what I work on automating).

`white_collar_automation * robotics_automation = building more, cheaper`

> The last piece is the cost of raw materials, which has also ballooned.

Which is about to explode as the tariffs hit the US market.

There is red tape and certainly there are planning bottlenecks, but the GCs already deal with this. Once a project is funded and started, an established GC will move quickly to execute on projects. Also - some states (CA in particular) have an absurd amount of red tape. If you go to states like Texas, it's much easier. Robotic tools are pretty common already (machine guidance for bulldozers, remote ops for excavators, mine trucks), so there's good precedent. We view our machines as tools for people to use, and given the labor challenges, have a ton of customer interest as a result.

Someone I know worked on the rad tape for the solar power plant in Ivanpah California, and he estimated that it added ten to 15 percent to the budget, not counting the added cost of the delays it causes.

This is a bit like saying "if everyone was just honest and a good person, we wouldn't need police or jails or criminal judges". All these things exist for a reason (except for kickbacks). We have labor unions because of worker exploitation. We have zoning to protect personal freedoms of existing property owners. We have environmental impact studies because corporations have proven they are willing to freely dump toxic materials wherever they feel like.

Wanna know what we need? MARPA: management and research process advancement.

Yes or no: can the USA get a medium sized build done on time and budget comparable to the top 15% worldwide?

There has to be way to kick this problem in the butt. And i think management side has gotta step up

This would help mega projects in middle east

all the labor is imported from abroad and live in miserable conditions, no unions or paperwork, just lots of earthworks to be done

I believe SchemeFlow [0] is working on solving some of these problem, particularly with the insane reporting requirements. But of course, that still leaves the unions...

[0] https://www.schemeflow.com/

If there are no jobs, you don't need unions!

The unions will use their government connections to force the job to exist even if it doesn't need to be. They'll figure out a way to get a union driver sitting in an fully autonomous truck for some invented safety checkbox

I remember Louis CK said he had a hell of a time trying to run his own comedy shows so he could offer lower ticket prices for his fans, but because every bit of the theaters were unionized it got really expensive fast and failed. They couldn't even touch the curtains, they had to pay a union guy to stand around all day and his only job was pulling a curtain cord at the right time. Which was some NYC rule.

> The unions will use their government connections to force the job to exist even if it doesn't need to be.

And that's OK. At the end of the day, labor unions exist to help people and not robots.

People were worried robots were going to take their jobs. Then people were seeing their jobs get shipped overseas. Today, robots are finally taking over what jobs are left.

> At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

its okay if you belong to the union. It makes the world worse for everybody else

The 5 days work week, the paid holidays (in the country where they exist), and rights on the place of work wouldn't have been obtained without all the struggles of the working class in the past century, by striking and unionizing. They literally made the world better for everyone (except the people owning companies)

My FIL spent 30 something years as a union carpenter and for about 15 of that was teaching underprivileged kids carpentry and finding them job placements while rebuilding national parks.

That union did just fine for America, it's better off for it having existed.

Yesssssss!

> a small cost seems to be the actual labor and materials

Say less.

HN used to be a message board to gain better knowledge around certain topics, but seems it more or less has the same armchair dilettantes that plague other platforms.

> Hell these robots if they work will be made illlegal.

Why are heavy machines like diggers and cranes legal then? Human operated, but replace countless workers on the site.

To wargame the a rebuttal to this, the red tape might be circumvented just because there aren't rules to govern robotic work. You can fully agree to only use union labor, to only have humans working 8 hour days, or to only use certain contractors for hired work, simply because these systems aren't human operated (likely they will be early on, but you could spin it as this).

There are laws for people, but not necessarily for tools.

they will put the rules on place for automated tools very easily ( look at how every state is pulling together a patchwork of AI regulation)

Tech startups have become giants by flaunting rules. This seems like an opportunity.

Rules for things like environmental studies, zoning, and planning exist for very good reasons.

Every rule exists for a good reason.

Sometimes you need a reset.

Break the rules, abuse power, make new rules.

Tech can help with the politics as well. More construction would happen if it was technologically possible for it to be so fast that major projects could be finished in a single election period.

If you read the other comments made by this user they are exactly the political leaning you expect, including support for the BBB among other similar opinions.

It doesn't matter. The costs are fungible to the buyer, if the price is lower in any regard it becomes a better value.

Pre-fab is illegal in a lot of places too. Pre-fab is for the poors! Houses in this neighborhood must be assembled on site by lumber by a team of expensive humans from raw lumber, not at a factory churned out by the hundreds, shipped on site on a truck, and quickly put together.

Like yeah, typical pre-fab, where it's legal, is going to go into a trailer park or something, but nothing says pre-fab has to be cheap and crummy. Why are we still cutting lumber on site?

Politics certainly adds layers of cost, but it doesn’t change the fact that budget overruns almost always stem from unpredictable, non‑political variables, sudden material price hikes, weather delays, labor shortages, or subcontractor disputes.

So tired of this lazy take. The large projects are expensive because they are large, difficult, and require planning between dozens of different companies and contractors. Do you work in the construction industry? Or do you build "apps"? Real building requires literal blood and sweat and affect ecosystems and communities. It's going to be expensive and it should be.

There is a well-documented cost premium to building in America that isn’t explained by complexity or wages.

Could you link to some analysis on this?

https://transitcosts.com/

Transit costs are a small fraction of "construction". I agree our transit development costs are insane though this has a lot more to do with America's very strong concept of property rights (and the weaponization of other apparatus to defend property rights) than simply "red tape." I.e. it's more political than bureaucratic.

most of that applies to all construction.

No it doesn't. Any publicly funded construction is rife with tons of additional regulations designed to limit (but sometimes perpetuating) corrupt contracting, and transit projects in particular have very unique needs around land acquisition.

Even still, the linked website doesn't really seem to say permitting is a major driver. And it certainly doesn't dwarf labor and materials.

Data was asked for not proff that it is permitting.

There you go.

https://pedestrianobservations.com/2019/03/03/why-american-c...

And if one asks Claude.ai , one gets this:

Bottom Line: US infrastructure costs are dramatically higher than Europe - often 10-30 times more expensive for transit projects, with subway construction in NYC costing $3.2 billion per kilometer compared to just $100 million per kilometer in cities like Madrid.

Kinda ironic that Europe is seen as the very definition of bureaucracy and red tape by many Americans, when this sort of data shows it's actually quite efficient

Point 9 is funny (although not funny in reality)... Americans have NIH syndrome basically.

I suppose only once the boomers die out will we have a chance of course correcting incuriosity. I actually remember many years ago some of the justices at the supreme court got real uppity when examples were brought up from other countries (forgive me i forget the case name).

yeah NYC spent a billion a mile on a new subway line.

That's not analysis

That is all changing.

Not around here. Even the rural cities are starting to emulate the large city bureaucracy with ever increasing regulations and hoops.

Unless you know the loopholes.

And yet, despite all of this, in most of my country (Canada) we have a construction labour shortage. Getting anything built is hard (and expensive).

You must live in Chicago - lol.

Permitting, zoning, etc are all like <3% of a construction project’s cost. This is a meme with no basis in reality.

All of the cost is labor and materials.

That said, the time component of the zoning, permitting etc is very costly due to how real estate projects are funded and evaluated.

I don't think a construction companies bank account cares about whether money is going to the time component or the physical act of going to city hall to apply.

Also remember there are frivolous lawsuits, CEQA type laws (which was recently overhauled atleast in California), NEPA on the federal level which most people roll into the cost of permitting/zoning. This is no meme, this component is huge.

The time component isn’t draining bank accounts…

> time component isn’t draining bank accounts

Of course it is, why would you think the land and other capital can be held for free?

The carrying cost of land is very low compared to any overall project.

The issue is that extended timelines drive down the IRR and add risk which is not the same as being expensive to carry.

> All of the local large projects around me are expensive because of massive amounts of red tape

This just isn’t true. There are projects that could be happening but aren’t because of red tape, but no, a project that’s happening is spending a tiny portion of its capital on red tape.

It's not just carrying cost, it could be the full A&D cost, so you're paying the loan on the mortgage without being able to build anything. That's huge and has sunk major projects around me. This happens, literally all the time [1][2][3], all around the country.

What's more, the fear of doing this has basically staved off all but the most brave companies, or giant conglomerates that can buy land cash, which is the most predictable byproduct of excessive regulation at a local level like this.

[1]: https://jerseydigs.com/american-dream-owners-default-on-1-2-...

[2]: https://www.axios.com/local/phoenix/2023/11/08/one-camelback...

[3]: https://www.reddit.com/r/sanfrancisco/comments/y2ein5

"The issue is that extended timelines drive down the IRR and add risk which is not the same as being expensive to carry."

Confusing statement, the IRR is low and the risk is high because the carrying cost is unknown (and unbounded).

> carrying cost of land is very low compared to any overall project

In New York and San Francisco? And it's not just land, it's keeping all the environmental reviews and neighbourhood associations on board. It's delays in pre-selling, or, if you're pre-sold, customer service to impatient buyers. It's constantly redrawing plans because a community member wants an offset 3/8ths of an inch further so their petunias don't catch shade.

Again, these costs add hundreds of thousands of dollars to each and every apartment built in San Francisco.

> This just isn’t true

What are you responding to? The quoted text isn't mine.

Is there a reason you're pointing out San Francisco and New York in particular? Is it because we both know they're by far the most absurd instances of this problem and quite obviously unique in how absurd they are?

It all started in San Francisco and New York, but now the disease has spread everywhere. Frankly the disease was always there. Millennials trying to buy houses en-masse over COVID is what exposed it.

Nobody notices it because it's nationwide (and to a certain extent worldwide) and it's a city-by-city policy issue [1][2][3]. But it's the same issue everywhere, over-indexing neighborhood preferences to slow down and kill construction projects behind a permitting process.

[1]: Denver, https://denverite.com/2025/04/14/denver-construction-permitt...

[2]: Toronto/Ontario, https://www.cbc.ca/news/canada/toronto/ontario-housing-const...

[3]: Atlanta, https://www.bizjournals.com/atlanta/news/2024/06/20/metro-at...

I don't know what point you think you're arguing against.

I am not denying permitting exists and it slows things down. The original point was that this is a major contributor to cost of construction, which it's not. They specifically said "a small cost seems to be the actual labor and materials [compared to permitting etc]"-- this is absolutely not true. It is not even close to reality in the US.

Here you're just pointing out two facts:

1) Permitting exists (and slows things down)

2) We have a housing shortage

No argument there! But what you are failing to do is demonstrate that (1) is the major driver of (2).

The actual drivers are the cost of well-situated land, cost of labor, and cost of materials. This is evident in ANY actual budget from ANY actual construction project.

Add to that the fact that large scale homebuilders are petrified of creating a 2008-style oversupply so they've been chronically underbuilding since then -- and will continue to do so regardless of permitting reform. This is evident in the housing starts compared to population growth since the GFC.

There have been 3-4 different comprehensive reports linked in this thread laying out that actually holding costs (please search), legal fees are one of the main drivers of cost along with the 2 others you mentioned.

But specifically, it's the worst one because it's unbounded (labor and materials is really costly now, but its a known cost) especially in states with heavy environment regulations or other zoning regulations. In those states, usually any one person can bring in a lawsuit alleging a lack of environment studies or alleged personal damage to slow down construction, so how much holding costs do you budget for? How much lawyer fees? How many people will bring lawsuits? You have no idea!

Most projects just don't start if they have a bracket for unbounded costs like that. So now you have fewer and fewer parties willing to take on these projects with more and more people (neighbors, bureaucrats etc.) having the bandwidth to pour over each individual project looking for an opening to sue and stop. It's a doom-loop of red-tape.

Do you think the California legislature (not the San Francisco legislature mind you) is wasting its time dealing with this, if it's "not that big of a deal" [1]. The governor ransomed the whole state budget to get this passed. Similar things happened in Minnesota. This is a huge deal.

I encourage you to read the various books laying out example after example of these issues and the background data [2], [3].

[1]: https://calmatters.org/housing/2025/06/ceqa-urban-developmen...

[2]: https://www.philipkhoward.com/the-rule-of-nobody

[3]: https://en.wikipedia.org/wiki/Abundance_(Klein_and_Thompson_...

Honestly I get the sense that you're not even reading these links. They do not substantiate the argument that you're making.

I have at least skimmed every one of the links you've shared (except the Atlanta BizJournal since I don't have the nationwide subscription) and none of them say what you're suggesting they do.

I agree there's a problem here. I agree that these risks kill many projects before they are birthed. I do not agree they come anywhere close to the costs of land, material, and especially labor for any actual construction project. Nothing you have posted even attempts to argue that, AFAICT.

I think you're hung up on fractions, while the business logic is obviously hung up on the value. The cost of wood has gone up, but wood is a critical element in construction. What is the "value" of paying $100,000's in lawyer fees?

It's like buying a home and having to pay 10% in agent fees and having a 6 month arbitrary holding period while you are still having to pay the mortgage. "Well the money you're losing is less than the cost of the land!" you would say. lol.

That's basically what's happening to construction projects, it's an industry-wide show-stopper regardless of what fraction it is of the land price.

All the links I've shared confirm that these costs are the prime-driver of project cancellations and projects dying on the drawing board, not that the costs are larger than all other costs in an absolute sense because obviously mortgage payments while you're waiting for lawsuits are less than the whole land value itself.

So in other words, the original poster who I replied to is wrong, and I am correct.

You are now saying the exact thing that I stated above.

When permitting (etc) delays your project for N years, and materials and labor now cost that much more, that drains your bank account. Sure, maybe you got some return on your money, but many times that won't be enough to cover the increase in cost.

That's not to say some amount of review isn't appropriate, but excess review (wherever the line is) seems to be just a way to discourage building by process nightmare, when there's no other way to do it.

I've also seen a lot of things where variances go to those who have the patience to play politics, which often ends up being pretty inequitable. And then there's the times where permit issuers aren't consistent; request X get told to do Y, update your permit to request Y, get told to do X, etc. Or my favorite, ask to do A, get told to do expensive thing B to prep, do B, then get told A will not be permitted anyway. Typically, there's no recourse for these things either.

You're referring to the delta in material and labor between project start and project permission? That's also a fraction of overall costs.

So it should be easy to find sources to show this "huge" component.

Yes, it is [1][2].

[1] https://libertylensecon.substack.com/p/unlocking-americas-in...

[2] https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&d...

This is correct.

> the time component of the zoning, permitting etc is very costly due to how real estate projects are funded and evaluated

How is this not part of the cost of permitting and zoning! If you took those processes out, those financing costs wouldn’t exist.

Last time I did the math, San Francisco’s permitting process financed at going rates meant a price floor of over half a million dollars for an apartment. That’s before we’ve even built anything.

I am not saying costly in direct “money being spent” terms. I mean costly in “adversely affecting project investment profile.”

This is not the same as costing a bunch of money.

No, it's worse because the costs are diffuse and so harder to predict and manage.

The delay induced costs are not the only negative impact. During permitting the muni will often make varrious cost adding demands that they have no basis in law or good engineering to make, but unless you're willing and able to take on more years of delay (and potential litigation costs) you have to go along with them to appease them.

And, of course, every opportunity for a subjective call allowing a disruption is a opportunity for corruption.

Maybe! But it still does not comport with the original post that I replied to which said that permitting etc are the major driver of cost of any construction project. It is not.

The point being made is that if you consider permitting holistically by attributing to it all costs that wouldn't exist if permitting didn't exist-- the cost is much greater.

When people complain about the costs of permitting they mean the these total costs, not e.g. some 1% of total project costs filing fee or whatnot.

Okay then, please demonstrate it and/or provide evidence.

Otherwise you're on a thread where someone is pooh-poohing an effort to improve costs where we know they exist (labor) and suggesting it is meaningless compared to costs that you can't substantiate.

Show us the math, please.

Here you go: https://news.ycombinator.com/item?id=41358952

I don't know where you live, but I'm familiar with multiple construction projects in the northeast US where permitting was between 10 and 20 percent.

Yeah if it was legal instead of technical hoops buildings would be flying up in unincorporated parts of Mississippi or Alabama. There's a huge difference between states when it comes to codes and enforcement

Actually 70% labor and 30% materials, on average. You will never believe that some times contractors propose to do curtain wall as alternative to masonry because pre-fab stuff actually a lot cheaper.

That's not directly related to this topic? This guy isn't starting a construction company. He is intending to sell tech to existing ones.

We need a silver tongued LLM agent that can align all these forces (and a well provisioned MCP paypal tool for greasing palms)

> massive amounts of red tape (environmental studies, zoning, planning)

Well, we've seen what happened without the red tape, when people were free to do whatever the fuck they wanted, and the results often aren't pretty. Sometimes, they were deadly, and occasionally we are reminded of why it might not be a good idea to just let the "free market" do what it wants [1].

Red tape doesn't just appear out of thin air, it appears when politicians are so pissed off about the "free market" that they actually find it worthwhile to do their goddamn jobs for once.

[1] https://en.wikipedia.org/wiki/East_Palestine,_Ohio,_train_de...

> Red tape doesn't just appear out of thin air

It mostly appears when politicians force law-enforcement not to punish bad actors for so long that society requires them to punish everybody so that the bad actors will go away.

Law enforcement can only act when laws are broken, that's the point. And building codes, zoning codes, that kind of stuff isn't a matter for law enforcement aka police unless someone gets seriously hurt or killed anyway - but if what happened was legal, it's considered an "act of God".

Law enforcement isn't the same as police. And laws aren't the same as red-tape.

This is a red-herring. No one is suggesting loosening laws on whether a building will stay standing.

The red tape is literally on whether barn owls in Downtown Mountain View will be hurt by an apartment building. This is not a serious consideration and is blatant NIMBY value capture and should be stopped and removed.

What's more, if you don't build that apartment downtown, expect real environmental damage when wild flora and fauna is paved over to build another exurb and highways to connect it all AKA the last 50 years of North American housing policy

> we've seen what happened without the red tape, when people were free to do whatever the fuck they wanted, and the results often aren't pretty

You mean most of the built environment of New York City?

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