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Comment by Avicebron | Hacker News Reader

Interesting essay.

There is this factory for lack of a better word near me that makes houses, packages them on a truck in pieces, and will ship them around the US to a foundation. All is said and done it's _maybe_ 100k cheaper to go with them than to buy the land and find your own contractors (and when the cost is between 300k-750k either way it doesn't really matter).

The essay touches on why this is the case, but fundamentally the issue with homebuilding isn't that we haven't optimized how to build houses. It's that only certain small segments of the population have seen anything but crushing decreases in wages on top of rampant inflation. So of course, when the average income of a region is 35k and the average house is 650k, there are issues that optimizing can't solve.

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The reason prices are high is lack of supply. Lowering costs of construction is one way to get slightly more supply but it's mostly governments and NIMBYs preventing construction. The high prices would bring in lots of people willing to build but they're blocked constantly.

> Lowering costs of construction is one way to get slightly more supply but it's mostly governments and NIMBYs preventing construction.

In some places this is true. But in others it's just as true that builders would be happy to build but the people who need the houses can only leverage their 35k/year income in making that happen. And if you brought in some equity firm to then build the houses, they do so at market rates and want returns, which then prices out the people who can't pay the builder themselves.

That doesn't make sense. Developers don't wait around until you pool your money together with strangers to fund apartment construction. Density and supply explosion are what bring down prices.

This is not universally true. There are vast swathes of the country where you can explode all the supply you want, the people who live there will be simply unable to afford them. As in they can not afford the cost of material and labor, even assuming supply drops profit to zero.

Supply is not magic. It can't reduce the cost of something below the cost of material and labor.

> Supply is not magic. It can't reduce the cost of something below the cost of material and labor.

I'll agree it's not magic, but supply can drop the cost of something below the cost of materials and labor, if you equivocate a bit.

If new houses are going for $250k in your area, old, used, smaller houses should be going for less.

Except for the fact that in high desired locations the property cost is 2/3 to 4/5 land and the rest the building on the top. In the case of a really old crappy building it might be 6/7 is land and 1/7 the building but in those high demand places from your 250k, 140-180k would be going just to the land leaving you with a paltry amount for the actual structure.

What we need is LVT or better public transport to either give money back to the people who create the value (average citizens) or to create an increase in desirable places to live (as in can get in <30min to work, do shopping etc etc) or more remote jobs for more people so they can move to lcol areas

Unfortunately the nimby's on average are most home owners (60%) and close to be home owners... ~ "temporarily embarrassed millionaires" ~ "everyone starts of libertarians and ends up conservative" aka first you fight for more housing then when you have it you become like the average homeowner...

That's not how supply and demand work. The builders make new, usually expensive housing, the people making enough to afford them move out of their older cheaper houses into the new ones, those older houses are now on the market, people who can afford those move in, freeing up cheaper ones, repeat, bottom of the market has new openings.

Regardless of the supply, the floor of a price of a new home will be the cost to build though?

The new homes are not the source of cheap housing, they are the source of expensive housing, but people buy those free up cheaper houses, people buying those free up even cheaper houses, etc...

On housing, I no longer think that a fringe group of NIMBYs override the will of the majority. There have been attempts to use direct democracy ballot measures to go around the NIMBYs and elected representatives and allow building. Most of the time, these ballot measures fail. If NIMBYs were truly a fringe group, these ballot measures would succeed.

Personally I would be in favor of a constitutional right to build to override these local restrictions. I think that would cause a lot of economic activity and growth due to all the construction which would happen. But I accept I am in the minority on the housing issue and I don't think it will ever happen.

I didn't see the word "fringe" in the post you responded to. Most people are NIMBYs.

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