[liber8]

If construction takes longer, costs increase. This is indisputable.

Imagine you buy a piece of land for $100,000 with the intention of developing it. Until the property is developed and sold, you have numerous carrying costs (taxes, insurance, debt payments, etc.). In California, your annual carrying costs may easily be $8,000-$10,000 per $100,000.

If it takes you one year to develop the property, you need to sell the property for $108,000 just to cover the carrying costs (i.e. this doesn't account for the actual construction costs or selling costs). If it takes you two years to develop the property, you need to sell the property for $116,000 just to cover the carrying costs.

Keep in mind, the time to develop isn't idle time where the developer incurs only carrying costs. It's endless drafts, consultations, and meetings. It requires actual money to be paid not only to the city, county, and state, but to architects and planners and contractors to comply with increasingly byzantine and mercurial requirements. The longer this goes on, the more money a developer has to spend.

The longer a developer is forced to carry the property, the more they need to charge to recoup their investment. Since no one is going to develop property without anticipated profit, this means prices necessarily rise.

[adamredwoods]

Regulations are known upfront. Good contractors and architects know each city's processes and how to navigate through them.

[analog31]

That's probably true, but it also limits the number of available contractors to the ones who know a particular city's processes. It would be harder for a smaller contractor to operate across multiple jurisdictions. So it limits competition, which drives up prices.

[jdminhbg]

> Regulations are known upfront.

Ideally, yes. In practice, no. Capricious zoning and development regulators are on the HN front page at least weekly.

[scarface74]

That may be true. But that means it makes much less sense to build “affordable homes”. Even though the home we had built (through a builder) 3 years ago was very reasonably price (Metro Atlanta) at less than 350K, we chose the smallest, cheapest floor plan available and still ended up getting 3100 square feet.