2/22/2026 at 7:57:35 PM
Token reduction in labor costs are not going to solve housing to start with. It doesn't cost a 2 million dollars to build a house in California because we pay framers $1,000 an hour, it is property costs and a shitty political class blocking competition to their and their buddy's current investments.by AngryData
2/22/2026 at 9:02:35 PM
What surprised me the most was the fees that just piled on. I knew the land, labor and materials costs.Just the sewer (the capacity only, no work done) was $11k. Then add on the park and school fees which both were over $10k. No wonder it a builder has to build something over 2000 SQFT to make it pencil out.
by usnelson
2/22/2026 at 10:00:03 PM
The reason for most of those fees for parks and schools is because Prop 13 has prevented property taxes from raising with the market on older property owners (and the LLCs that own commercial properties), so cities and school districts have to instead turn to newcomers to get some amount of revenue to cover the costs of providing public services.by drewda
2/23/2026 at 1:07:32 AM
We have a great system here I believe - or at least great enough? - councils charge a percentage of the hypothetical rental value of the property in fees/taxes (in reality this hypothetical rental value is quite a bit below actual rental values - they don't seem to minmax their income).by Incipient
2/22/2026 at 9:12:06 PM
It shouldn’t be a surprise.Buying property should have the same transparency (into costs and fees) as breakfast cereal with nutritional labels.
by newsclues
2/22/2026 at 9:33:26 PM
> No wonder it a builder has to build something over 2000 SQFT to make it pencil out.I'm with you up until that. Maybe there are places where you have to build over 2000 sf due to regulations. For the most part, this is an industry talking point to justify building expensive houses on the limited land that gets zoned for residential. It gets repeated a lot.
You can build smaller houses but you can't charge as much for them. I'm not faulting the builders for maximizing profits, but it's still a talking point. (And in the grand scheme of things, it's not the reason housing is unaffordable.)
by bachmeier
2/22/2026 at 9:48:50 PM
> I'm with you up until that. Maybe there are places where you have to build over 2000 sf due to regulations. For the most part, this is an industry talking point to justify building expensive houses on the limited land that gets zoned for residential. It gets repeated a lot.I kind of feel it is the inverse.
If you can build a house for X$/sqft, you have a linear relationship. If it costs 100k _plus_ X$/sqft (for sewer, permits, etc) now you have a floor. You can sell a bigger house for 600k, or a 35% smaller house for 425k, odds are you’ll sell the bigger house quicker. I bet the 325k homes would sell like beanie babies in the 90s in places like sf.
The actual problem, the elephant in the room, is that California is expensive, both by popularity and regulation. This makes for an embarrassing conundrum where California is simultaneously pushing poor people out while trying to subsidize their life via social programs.
I don’t think it’s working.
by irishcoffee
2/23/2026 at 2:23:42 AM
> You can sell a bigger house for 600k, or a 35% smaller house for 425k, odds are you’ll sell the bigger house quicker.Yes, and that's the point I was making in my comment. What's driving the price gap is that you're selling to a group with a much higher capacity to pay when you're building the 2000 sf homes.
But that has nothing to do with it being unprofitable to sell lower-priced homes, it's just less profitable. The talking point makes it sound like the home builders are trying to do good things, but they're victims of the government. No, it's nothing more than a desire to maximize profit, because the folks that are looking for 2000 sf homes are high income households with kids, and they're willing and able to pay a steep premium for that house.
by bachmeier
2/23/2026 at 4:08:24 AM
I never suggested it was unprofitable. I said it’s easier to sell bigger homes because of regulations and financials.You believe that builders are this nefarious cabal. I don’t think this is true. Hanlons razor and all that.
by irishcoffee
2/23/2026 at 1:03:48 AM
.by dangus
2/23/2026 at 1:08:36 AM
>>> What surprised me the most was the fees that just piled on. I knew the land, labor and materials costs. Just the sewer (the capacity only, no work done) was $11k. Then add on the park and school fees which both were over $10k. No wonder it a builder has to build something over 2000 SQFT to make it pencil out.>> The actual problem, the elephant in the room, is that California is expensive, both by popularity and regulation. This makes for an embarrassing conundrum where California is simultaneously pushing poor people out while trying to subsidize their life via social programs.
> I think your comment works by making a bold assumption that construction in California is wildly expensive than elsewhere and that it’s the major driver of cost.
I didn’t make any bold claims.
by irishcoffee
2/22/2026 at 10:00:08 PM
Tangibly related.IMO the North America economic-societal "model" is High cost + More regulation. Everything is legal and proved by some experts, and regulated to the maximum, but in reality they also build moats after moats for existing interest groups (landlords, insurance companies, big contractors, etc.).
And everyone thinks this is the right model for "democracy" and "ruled by law". People may blame for part of the model (e.g. landlords) but never realize that the whole model is built to support this.
This is my observation so definitely biased.
by markus_zhang
2/22/2026 at 11:13:54 PM
California < USA < North America.by nine_k
2/22/2026 at 8:53:16 PM
It’s wild to hear people scape goat REIT funds and campaign for rent control when the real problem happens to be “average people” owning investment properties. Step 1 of fixing the problem is the immediate repeal of Prop 13.by tylerflick
2/23/2026 at 3:03:59 AM
I kind of think prop 13 was for "normal people" but has benefitted corporations, which can lease out a property forever without changing hands.by m463
2/22/2026 at 9:09:33 PM
Repealing Prop 13 would be good, but wouldn't fix the core problem, which is that CA (and most of the US) is literally decades behind on building sufficient housing units for population growth because of self-inflicted zoning and permitting problems. California isn't unique in this, Prop 13 just makes it even more painful because old people hang onto houses that are too big for them and so constrain the already-limited supply more.by crooked-v
2/22/2026 at 9:27:27 PM
Prop 13 isn’t the reason old people hang on to their property. You can downgrade and maintain your Prop 13 tax advantage.by onedognight
2/22/2026 at 9:59:28 PM
Most of the smaller, walkable places that are not car dependent do not allow that Prop 13 transfer, because it's mostly rental places.Condo defect law is far far more onerous than defect law for single family homes, to the point that it doesn't make sense to offer units for sale. There are those working on reform but it's a slow process.
I have see it happen with older friends: they could move to a smaller place that's more appropriate but they'd had to pay a ton more.
The Prop 13 distortion on the market is very extreme. Perhaps even more so than the super low pandemic interest rates compared to today's interest rates.
by epistasis