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What Makes Housing So Expensive?

5 pointsby worldvoyageurabout 1 year ago

1 comment

worldvoyageurabout 1 year ago
A typical American 1600 square foot single detached home costs $180K to build (~$122&#x2F;square foot). Costs beyond that:<p>- the land underneath the home, which can be expensive or cheap, depending on location. Land costs are consistently in the order of 25% of the total cost.<p>- construction costs tend to be higher in more expensive locations (New Tork City)<p>- financing costs, $12K<p>- real estate&#x2F;marketing fees, $27K<p>- builder profit, $60K<p>- permits and inspections, $19.2K<p>- architecture and engineering, $5K<p>Most significant is that about 125 million Americans live in a place where the land cost is more than 50% of the total cost and 16 million live in a place where the land share is greater than 70%.<p>In those places, lower costs come from allowing greater density, which divides the land cost among a much greater number of housing units.