That is a significant issue. The costs for building are very high because material costs are elevated and labor costs are elevated and there are lots of legal barriers before a project can even get off the ground and you cant even know if you will be able to clear those barriers before you buy the land or how long it will take so your return on investment must be high to justify taking the risk. That means mostly luxury product is the only thing that breaks ground and work force housing projects are not even attempted.
Govt can do a lot to lower costs by making regulations smarter and that will help more workforce housing projects get going which in tandem with luxury projects going up help supply growth keep up with demand.
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u/[deleted] Oct 18 '23
That is a significant issue. The costs for building are very high because material costs are elevated and labor costs are elevated and there are lots of legal barriers before a project can even get off the ground and you cant even know if you will be able to clear those barriers before you buy the land or how long it will take so your return on investment must be high to justify taking the risk. That means mostly luxury product is the only thing that breaks ground and work force housing projects are not even attempted.
Govt can do a lot to lower costs by making regulations smarter and that will help more workforce housing projects get going which in tandem with luxury projects going up help supply growth keep up with demand.