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Long permitting processes also encourage construction of larger SFHs. The permitting cost is largely fixed whereas three profit margins scale with the value of the home which mostly scales with the size of the home

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yes bigger houses to an extent are way more profitable because there is a somewhat linear relationship between sqft and value but houses have a lot of fixed cost. there's probably a sweet spot around 2500sqft in suburban/exurban Dallas Fort Worth to maximize the market for the house and still generate low $/sqft such that the guy building something bigger next tract over isn't crushing you on $/sqft.

that 2500sqft house is still $200-250/sqft way out in the middle of nowhere where the land doesn't really even factor in much.

All this is why I believe our best bet is allowing density. Even if one doesn't want to live in a busy city center, making this an option for those who want it, reduces demand and thus prices for people who want SFHs

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