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Where in the west? In europe we use concrete and bricks, while the us something else. I believe anyone in the construction business will be able to explain that the most expensive part is the land actually. At least in europe.

In the uk for instance, the exact same new house, exact same materials, can be 100k GBP less in a cheaper area. Or even half in extreme cases.

It is the same in the US. While labor and materials do cost more, the greatest increase in costs is for the land. But since the US is big, there are huge disparities in land cost. While a laborer or materials might cost 2x or 3x more in a popular area than in an unpopular area, land will be 10x more.

Actually, the labor and land costs invert if you go to really unpopular areas, where the land is much cheaper, but no one lives there so labor is much more expensive.

“the US is big”

Thats what puzzles me.

What changed in the dynamics of the american society in such way that new cities are no longer built? I get it in europe there barely and land left to develop, but the us and canada have plenty.

The adjacent comment by kenned3 addresses this.

> Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work.

The density that was built 100+ years ago was built pre cars. The cities that are dense are dense because they happened to develop at the right time.

Now, everyone in the political process of building a new city is going to question where they are going to have space for large cars, which leads to parking lots, 35ft+ or 10m+ wide streets, and of course quarter acre lots for detached single family homes with garages and driveways.

Creating a new Manhattan type region is simply out of the question due to costs. If the nation cannot even do proper upkeep on existing Manhattan, then there is not much chance of digging all the rail tunnels and etc etc for a new Manhattan.

See my reply to kenned3.

I think the root of this issue is that we are forced to cluster in large cities for access to jobs. I think the way we approach blue collar work is wrong and tech should have solved it by now. There is no reason why we cant move most high end jobs to either small towns or in the proximity of large cities but in areas easily accessible from suburbs.

No need for a new manhattan. We need a totally new approach and it must be linked to how we work. I would be very happy to live in a small town, with narrow streets but well organised fast, cheap and reliable public transport, and work either remote or onsite but without the need to commute 2 hours a day total (24 hours of my life each 7 days).

This is a great conversation as there is so much input from around the world.

I can sort of paint the picture of what takes place here (Canada - also a large land mass country).

we have a rather large public rail system run by the government (GO Transit: https://www.gotransit.com/en/)

it is fairly cost effective, modern, and the trains are all new and comfortable.

we also have a major problem with a population which seems to refuse to accept they cant afford to live where they want.

Everything is about "affordable housing in Toronto", but this is unrealistic.

Once i had a conversation at work on this. A younger employee was complaining that he wasnt able to afford a nice house in Toronto and how "unfair" this was.

The problem is he was making these comments to 5 others, not one of us lived in Toronto either, as we cant afford it.

He refused to commute, and felt he was somehow "entitled" to live where he (and millions of others) want to live.

So in short, while the US and Canada have plenty of space, the population doesn't want to live there because the commutes are around an hour each way to work.

we also have serious NIMBY issues, where any attempt to increase population density is met with fierce resistance by the local residents who are concerned about their own property values.

Interesting.

It seems like the main issue is proximity to work and the reasonable demand for a short commute.

If that need would be satisfied then i think the resulting effect of wanting to build more in already crowded cities wouldnt be there, thus nimby’ism wouldnt be an issue because either since locals wouldnt feel threatened.

When i moved to london uk i had the same opinion as your colleague. I wanted a place to live as close as possible to work so that i would spend as little time wasted on commute as possible.

But remote work gave me the option to live anywhere and as such i chose an area outside london. Having the option to leave crowded centres i took it because it satisfies my need for work and a short commute.

So i am wondering isnt the root of all evil the fact that high paying jobs are clustered around large urban centres? Shouldnt tech have solved this issue by now? Even if people prefer office work, cant this work be done in smaller urban areas? Or at the edge of large cities such that people can easily commute from surrounding areas? I get it that in the last blue collar work had to be done in city centres so everyone can access services. But why do software engineers need to be seated in expensive city centres? Or indeed accountants, or even lawyers.

> So i am wondering isnt the root of all evil the fact that high paying jobs are clustered around large urban centres? Shouldnt tech have solved this issue by now? Even if people prefer office work, cant this work be done in smaller urban areas?

This gets into an interesting "can of worms" problem.

My background is finance which tends to be clustered around "financial hubs" (London, New York, Toronto...).

Again, I will keep my "Toronto" perspective as I am most familiar with it.

Why are all the banks located on "Bay street"? Because if you dont have a "bay street" address you are a "nobody". This odd mentality can be found globally, "wall street" , specific "pockets" of London.

The "big 5" banks here COULD build places in smaller urban areas, but those lack the "power" of that Bay street address.

Now that we established that for odd reasons you have to be located in "bay street" there is also the view that you must be "seen". Remote work is a career killer in Finance.

One large Canadian bank has started the "we want you back in the office" discussions :

https://financialpost.com/fp-work/rbc-staff-back-office-more...

RBC CEO asks staff to come into the office more often 'Technology can’t replicate the energy, spontaneity, big ideas, true sense of belonging and fun' of being in the office, CEO says

Now RBC has issued a press statement on this, the other Canadian banks will quickly follow suit (they move in lock-step with one another).

So.. work in finance, you need to be on "bay street" monday to friday. You don't want to commute, increase demand to live in Toronto.

Basic economics show that increased demand leads to increases in pricing..

See this :

https://www.blogto.com/real-estate-toronto/2022/08/toronto-r...

In a way i can see why finance is linked with the status expensive offices give but surely the bulk of the work which happens behind the scenes doesn't need to be located in city centres.

Moving everything that isn't client facing outside would do both a favour. Indeed demand drives prices up but it seems like the reasons behind that demand are a bit archaic.

As a side note I cant help but giggle about this: “true sense of belonging and fun”.

I sympathize with your younger colleague. Spending 1+ hours of your day, 5 out of 7 days per week, just to afford your own house would mean I would opt out of raising a family. Even 30+ min per day commute sounds terrible.

This is where things get even more strange.

Most people who do manage to afford to live in Toronto still have to commute. you can get condo's right in the downtown core, but they are insanely expensive.

So the debate he had was a ~30 min commute and a "toronto" address vs a 45-60 min commute and an address in a small city outside Toronto.

I worked in toronto a very long time, dont know many people who actually lived there. Most commuted from cities in the GTA (Greater Toronto Area).

Sometimes the commute is sort of unavoidable.

What are the options to avoid a 30 min commute if you work in a specific industry which prefers "on site" work, and that company owns property in a city you cant afford to live in?

You can change industries, etc.. but those are personal choices.

> You can change industries, etc.. but those are personal choices.

Yes, I looked around see older colleagues in NYC spending 5/7 days working and traveling to and from work just to get 2/7 days to live and decided pretty quickly it was not for me. It is okay in your 20s beside you can work and then party and work and party, but if your goal is to raise kids then that 2 hours on a train commute per day is soul crushing.

They are being built, just sort this list by % change and look at population over the past few decades:

https://en.wikipedia.org/wiki/Metropolitan_statistical_area

A bunch of places towards the top of the list (not just a few) have doubled or more in population over the past 30 years. It is just that in the US people have a death wish and often flock to places like Phoenix and Las Vegas and San Bernardino rather than some place sensible and organize cities into the same endless sprawl everywhere.

It really depends on the quality you want. I could easily Alec out a 2500 square foot home that has $300k in materials alone. High end windows, flooring, bathroom materials, and kitchens aren’t cheap. A fridge and range can cost $30k+ at the higher ends. Windows $2k/each. $10/sqft premium flooring. This doesn’t include labor yet which is another $100k-$200k. All this can go on a plot of land that costs $350k. Thus isn’t uncommon in higher end developments.

Of course, vinyl windows, cheap flooring, builder grade kitchen and bathrooms bring the cost down significantly. But it still adds up. Foundations aren’t cheap.

European homes tend to be much smaller than American homes and are very rarely stand alone single family homes. I get to the UK often and almost everything is connected and have small little “gardens”. This is fine and it makes for cheaper construction since there are far less materials and labor is shared across many homes. The hones are tiny by American standards too.

We don’t have this as much in the USA. People generally want single family homes that are 2000 square feet+ and 1/5 acre of land. This is a lot of roof, a lot of siding, a lot of timber, a lot of flooring, a foundation, etc. Easily 6-figures in materials and even more for labor, etc. Especially if you go with premium materials. Windows installed are $2k/window. My would cost $70k to install all new, premium windows for example.

Premium hardwood quarter-sawn flooring in a 3000 sq foot gone is another $30k, etc. You can start to see how this adds up from $100k+ in materials for trash to many hundred thousand for premium, quality materials.

The uk is a bit of an exception. The norm in continental europe is standalone homes and usually much larger. Europe is a diverse continent with varying property size and expectations.

The average European home size is nearly 1000 sq-feet (92 square meters) smaller than the average American home being built today. And yes, although there are exceptions and Europe is diverse, multi-family homes are far more common. I'm not saying this is bad - in fact I think America should probably do more of this since it's much cheaper to share resources.

But yes, I did some quick research and it appears homes in the UK are among the smallest in Europe. Lots of people on that island I guess. It's no wonder so many of them choose to move to the USA!

Here's an interesting graphic: https://www.businessinsider.com/ons-english-homes-are-a-thir...

> People forget that the average home was ~700 square feet 100 years ago.

Interesting related graph: https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5

Although we're currently in a frothy situation, scaled out a bit, it's not clear that housing prices are growing more than general inflation when adjusting for square footage. What _has_ happened is A) houses have gotten bigger and B) people per household has gotten smaller.

just need to tap the lid, and the froth goes away. problem solved

I’d love to go back 100+ years on that. Houses were made with better quality materials in many cases, but were much smaller and without things like fancy kitchens and bathrooms.

Good point.

Here in the Netherlands, an ordinary home, which is not an apartment and not even necessarily a fully stand-alone home cost 400K EUR minimum. That's land, material, labor combined. And you'd have a hard time actually building it due to all the shortages in both labor and material.

A big part of that 400K is land cost. Land that is typically given out for development by the municipality. It's one of their main revenue streams. So that means you can't make land cheaper without it directly coming at the expense of local taxes. And they're already running deficits even with these high land costs.

We have a plan to build an additional 1 million homes in 10 years, but it can't be done due to shortages.

The other thing nobody seems to talk about is what happens during an economic downturn. In the aftermath of 2008, almost nothing new got build. After all, why would a commercial developer build something without a buyer? Meanwhile, the demand for housing is still there and growing (population growth), it's just that people are unwilling/unable to step in, temporarily.

This piled up backlog is the reason for the current drastic shortage. As is the case for construction workers. All laid off during the downturn, and didn't come back.

Guess what will happen during the next economic downturn? Yep.

My point: there will be no point of supply meeting demand or even over-supply.

>Even apartments are super expensive to build and the reason you don't see many dwellings that aren't "luxury" is because the cost to construct and maintain them is so high that you'd never get your money back otherwise.

Luxury is just a marketing term. Luxury apartments are the cheapest apartment that are legal to build. Stainless steel appliances and quartz countertops are a rounding error in construction costs.

An actual luxurious apartment does not have to call itself a luxury apartment, the price being multiple standard deviations above the mean speaks for itself.

Well put.

Adding to this.

The government is always there, with its hands out looking to get a slice of the real-estate market.

- Property taxes

- Land transfer taxes

- Development fees

And once you buy your house, any attempt to improve it could trigger more government involvement. Building permits, inspection fees.

Your point is spot-on. I think a big part of it is "keeping up with the Joneses". Everyone wants that 3,000 square foot house, and naturally it has to be within walking distance from work.

Lastly - Location is a a major problem.

Here (Ontario) the common complaint is "i cant afford to live in Toronto" - Living in Toronto is NOT A RIGHT. No one owes you "affordable housing" in Toronto to avoid a commute. A Lot of people commute on the GO train daily..