Hacker News new | ask | show | jobs
by bsder 1279 days ago
> Land isn't really a big driver of housing costs

That is completely and totally wrong.

The land cost is BY FAR the biggest driver of housing cost in the California coastal cities.

The proof of this is that buying a house, completely demolishing it, and building a completely new house is not uncommon in California.

That demonstrates that everything except the land has a negative value.
2 comments
Manuel_D 1279 days ago
The point is that it's not a shortage of land. It's not that California as a whole isn't big enough to accommodate it's population. It's that specific desirable places to live are getting more expensive. You concede that this is true when you narrow your statement with "in the California coastal cities."

The problem is that people want to live in the desirable costal cities. The only way that's going to happen is if the city gets more dense. Cities that allow for easy construction are better able to convert low density housing in desirable areas to high density housing to accommodate the growing demand.

link
operatingthetan 1279 days ago
People demolishing poor condition or small houses and building high end homes on the land does not in any way demonstrate that buildings have negative value. You're taking an edge case and applying as a generalization. In many of those cases the homeowners are losing money on destroying the old house but prefer that location.
link
bsder 1279 days ago
If labor defined the cost, buyers would renovate. If materials defined the cost, buyers would renovate.

The fact that buyers demolish shows that the cost of labor and materials is significantly less than the value of the land. "losing money on destroying the old house but prefer that location" === value of the land is higher than the cost of the rebuild.

link
operatingthetan 1279 days ago
That doesn't show that improvements to land have negative value. You're also assuming that landowners always make the most rational value decisions with their properties and that's frankly just not the case. People aren't tearing down high value homes to build new ones, you're only looking at low value ones and applying incorrectly as a generalization to both.

In most real estate transactions where the home is clearly a tear down, it's priced in.

It seems like might have never viewed a property tax bill.

Here's my neighbor's house built in 2022 appraised values:

land: $465,000 improvements: $620,000

link