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Homebuyers canceling contracts

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The share of sale agreements on existing homes canceled in June was just under 15% of all homes that went under contract, according to a new report from Redfin.

 

https://www.cnbc.com/2022/07/11/homebuyers-are-canceling-deals-at-highest-rate-since-start-of-covid.html

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On 7/11/2022 at 11:43 AM, Billings said:

The share of sale agreements on existing homes canceled in June was just under 15% of all homes that went under contract, according to a new report from Redfin.

 

https://www.cnbc.com/2022/07/11/homebuyers-are-canceling-deals-at-highest-rate-since-start-of-covid.html

A lot of economists are irritated that home builders are tapping the brakes on starts, which cracks me up.  The macro goal of the Fed is controlling home prices, and they need continued inventory creation for that to happen.  But of course it's not their money, they don't have skin in the game, the builders do.  And your link is exactly why they are being so cautious.  If they survived 08, they aren't going through that again.

Of course, that also kind of sucks.  Because the limited inventory will keep pressure on prices to go up, which will lead to the Fed having to overshood the mark to get the desired result.

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I am going to share my experiences about one of the reasons why I think the US housing market is crazy.  I have just built a house in Costa Rica recently and I am helping my mom plan for a home in Colorado.

I have to agree that a lot of the problem is government involvement in the USA, but it is at the state and local level where we have most of the issues.  In right wing Colorado Springs they have one of the most sprawled out cities in the country.  In a lot in central Colorado Springs they are enforcing a 30% coverage limit.  There is like 10+ different departments that have to review plans and sign off on new construction.  

In the USA if you don't have a two car garage, it is like an afront to every American.  You also have to have at least 2,000 SQFT of living space.  When you factor in you must have a giant garage and house and you only get 30% coverage no wonder things are expensive and you have to drive everywhere.  Furthermore, the zoning is really more like a giant HOA to maintain property values of Karen's house by forcing local government to police your property for aesthetics instead of health and safety.  Zoning has become another way of intergenerational theft where the older "haves" lock in their property values and gains at the expense of the next generation being able to get off to a good start. 

In the USA there is no way for a young person to move out on their own and "bootstrap" really any longer unless you want to get a tent by the river.  You should really be able to get out of college or high school and be able to live on like $500 a month to cover all fixed costs like rent and student loans.  

The good part about the USA is that there are no shantys....the bad part about the USA is that there are also no shantys.  The minimum level of housing is so high that it is unattainable for young people that they can't simply bootstrap.  

San Jose Costa Rica is pretty "ugly" and unplanned as a city from my USA set of eyes.  But I also realize that it is also able to absorb a ton of people who are living "hand to mouth."  

To get a building permit here you have to have a safely engineered house that won't fall down in an earthquake.  There are no real "trades" here so it is kind of "buyer beware" when it comes to plumbing, electrical, etc.  That being said, if I really just wanted to buy a cheap house I can buy pre-engineered concrete pillars and slabs which slide between the pillars that you put together like a Lego set and put on a corrugated metal roof.  I could do a small 1 or two bedroom house for like $5-$10k for the basic labor and materials.  I couldn't do that for 10X that amount in the USA, not even considering the cost of land.    

The unlimited financing made possible by the federal government is also to blame.  When nobody looks at the actual cost of the house any longer and the only thing that really matters is the payment, nobody is cost conscious.  This is just like the ever expanding cost of higher education.  

It isn't like there isn't plenty of land in the USA.  Who is going to be the first person to guy a giant corn field somewhere and incorporate it and make a city and housing like they built after WWII for all the returning service members.  When will someone create a walkable city with small grocery stores like most of the rest of the world enjoys?  

This isn't Japan with only limited space/land.  It really baffle my mind as to why housing is so expensive in the USA.  It doesn't make sense.  

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On 7/12/2022 at 5:53 AM, Akkula said:

I am going to share my experiences about one of the reasons why I think the US housing market is crazy.  I have just built a house in Costa Rica recently and I am helping my mom plan for a home in Colorado.

I have to agree that a lot of the problem is government involvement in the USA, but it is at the state and local level where we have most of the issues.  In right wing Colorado Springs they have one of the most sprawled out cities in the country.  In a lot in central Colorado Springs they are enforcing a 30% coverage limit.  There is like 10+ different departments that have to review plans and sign off on new construction.  

In the USA if you don't have a two car garage, it is like an afront to every American.  You also have to have at least 2,000 SQFT of living space.  When you factor in you must have a giant garage and house and you only get 30% coverage no wonder things are expensive and you have to drive everywhere.  Furthermore, the zoning is really more like a giant HOA to maintain property values of Karen's house by forcing local government to police your property for aesthetics instead of health and safety.  Zoning has become another way of intergenerational theft where the older "haves" lock in their property values and gains at the expense of the next generation being able to get off to a good start. 

In the USA there is no way for a young person to move out on their own and "bootstrap" really any longer unless you want to get a tent by the river.  You should really be able to get out of college or high school and be able to live on like $500 a month to cover all fixed costs like rent and student loans.  

The good part about the USA is that there are no shantys....the bad part about the USA is that there are also no shantys.  The minimum level of housing is so high that it is unattainable for young people that they can't simply bootstrap.  

San Jose Costa Rica is pretty "ugly" and unplanned as a city from my USA set of eyes.  But I also realize that it is also able to absorb a ton of people who are living "hand to mouth."  

To get a building permit here you have to have a safely engineered house that won't fall down in an earthquake.  There are no real "trades" here so it is kind of "buyer beware" when it comes to plumbing, electrical, etc.  That being said, if I really just wanted to buy a cheap house I can buy pre-engineered concrete pillars and slabs which slide between the pillars that you put together like a Lego set and put on a corrugated metal roof.  I could do a small 1 or two bedroom house for like $5-$10k for the basic labor and materials.  I couldn't do that for 10X that amount in the USA, not even considering the cost of land.    

The unlimited financing made possible by the federal government is also to blame.  When nobody looks at the actual cost of the house any longer and the only thing that really matters is the payment, nobody is cost conscious.  This is just like the ever expanding cost of higher education.  

It isn't like there isn't plenty of land in the USA.  Who is going to be the first person to guy a giant corn field somewhere and incorporate it and make a city and housing like they built after WWII for all the returning service members.  When will someone create a walkable city with small grocery stores like most of the rest of the world enjoys?  

This isn't Japan with only limited space/land.  It really baffle my mind as to why housing is so expensive in the USA.  It doesn't make sense.  

Ok akkula. here are my thoughts on this.

On 7/12/2022 at 5:53 AM, Akkula said:

I am going to share my experiences about one of the reasons why I think the US housing market is crazy.  I have just built a house in Costa Rica recently and I am helping my mom plan for a home in Colorado.

I have to agree that a lot of the problem is government involvement in the USA, but it is at the state and local level where we have most of the issues.  In right wing Colorado Springs they have one of the most sprawled out cities in the country.  In a lot in central Colorado Springs they are enforcing a 30% coverage limit.  There is like 10+ different departments that have to review plans and sign off on new construction.  

Yes, regulatory burden increases the cost of home building. However it increases the cost of existing homes more. How? a couple ways.

First, it really really slows down construction. So when there are booms, it's difficult to ramp up demand to match; the construction delay is such that construction isn't responsive.

Furthermore, it makes it very difficult to do stuff like build a one bedroom mother in law suite on your own land. If you look at any American city, almost all old neighborhoods have additions added to houses, generally by the homeowner, and generally not permitted. That's impossible today, and navigating a permit for an addition or ADU is almost impossible for a homeowner not looking for a ~5,000 dollar consulting fee. The additional burden in terms of services and time and inconvenience is higher for these lower-cost items than for almost anything else. 

On 7/12/2022 at 5:53 AM, Akkula said:

In the USA if you don't have a two car garage, it is like an afront to every American.  You also have to have at least 2,000 SQFT of living space.  When you factor in you must have a giant garage and house and you only get 30% coverage no wonder things are expensive and you have to drive everywhere.  Furthermore, the zoning is really more like a giant HOA to maintain property values of Karen's house by forcing local government to police your property for aesthetics instead of health and safety.  Zoning has become another way of intergenerational theft where the older "haves" lock in their property values and gains at the expense of the next generation being able to get off to a good start. 

This is true. The average size of a constructed house has exploded. There's a large market for smaller houses, but they're less profitable than large houses. Hell, large vacation cabins are even more profitable, so labor is pointed towards building housing that does not help the housing crisis. Simple fixes, like requiring a minimum number of small houses or affordable houses per development, maximum lot sizes, etc. are anathemas as they might affect property value. So, the top 20% of homeowners get richer as the bottom 80% of Americans struggle more and more. Zoning, instead of acting as a tool of urban planning, is instead entirely captured by the interests of those who are already fine. 

So homeowners are caught between over-regulating not letting them have cheap housing... and over-regulating outright not allowing cheap housing. 

On 7/12/2022 at 5:53 AM, Akkula said:

In the USA there is no way for a young person to move out on their own and "bootstrap" really any longer unless you want to get a tent by the river.  You should really be able to get out of college or high school and be able to live on like $500 a month to cover all fixed costs like rent and student loans.  

The good part about the USA is that there are no shantys....the bad part about the USA is that there are also no shantys.  The minimum level of housing is so high that it is unattainable for young people that they can't simply bootstrap.  

Yep pretty much. Right now the only way to get affordable housing constructed is with government funds. The mishmash of state and local and federal governments have accidentally conspired to make building affordable housing uneconomical. The market is severely distorted. 

On 7/12/2022 at 5:53 AM, Akkula said:

San Jose Costa Rica is pretty "ugly" and unplanned as a city from my USA set of eyes.  But I also realize that it is also able to absorb a ton of people who are living "hand to mouth."  

To get a building permit here you have to have a safely engineered house that won't fall down in an earthquake.  There are no real "trades" here so it is kind of "buyer beware" when it comes to plumbing, electrical, etc.  That being said, if I really just wanted to buy a cheap house I can buy pre-engineered concrete pillars and slabs which slide between the pillars that you put together like a Lego set and put on a corrugated metal roof.  I could do a small 1 or two bedroom house for like $5-$10k for the basic labor and materials.  I couldn't do that for 10X that amount in the USA, not even considering the cost of land.    

So... Costa Rica is not the United States.

First off, in my brief 2 minute research on Costa Rica, the seismic there is about what it was in Wenatchee - so wind will always control single story residences. You don't need those engineered, because the IRC provides proscriptive design. So that's nice and easy.

Second off, a lot of the things that are cheaper are because of Costa Rica's climate and geology.

Foundations? Costa Rica is volcanic and in general younger than a lot of the US. Expansive soils are less of an issue. Costa Rica has no freezing, so frost depth just isn't a thing. You can't just have a pre-engineered pillar and slab foundation in the US. 

Plumbing? Costa Rica doesn't freeze. You don't have to insulate/bury pipes. You don't have to insulate sewage. Costa Rica is fairly hilly so sewer is easy. CR is densely populated in the central valley, so water utilities are economical by scale. If you try to mcgyver plumbing in most of the US like that, you'll end up with burst pipes and a ruined house. It's just more expensive to build.

Electrical? CR's electrical... leaves something to be desired. Plus, there's no heater in a house. There's no AC. The shower is a nightmare suicide machine. All you really need is power for lights, fridge, stove. It doesn't get hot enough to need AC. It doesn't get cold enough to need heat. It's just... whatever.

Insulation? See above. Confined masonry and adobe have large enough thermal masses that they regulate heat. Fans for night time are enough. That's a lot - a lot - less cost. 

Construction quality? If your windows and doors leak in the US, that's up to hundreds of dollars more a month in heating costs. In Costa Rica it just means you need to burn those little green anti mosquito thingies. 

A 1-bedroom house in Costa Rica has more or less the same construction requirements and quality as a tool shed in the US. And... lo and behold, that's about 2500 bucks. add a little bit for electric and plumbing, maybe some wall finishes, and you're right on.

Except there is nowhere in the US maybe outside of Hawaii that has the combination of climate, soil, water, and density that lets CR be that cheap to live, and I do not believe that Hawaii has the regulatory environment to realize how much cheaper housing could be. 

On 7/12/2022 at 5:53 AM, Akkula said:

The unlimited financing made possible by the federal government is also to blame.  When nobody looks at the actual cost of the house any longer and the only thing that really matters is the payment, nobody is cost conscious.  This is just like the ever expanding cost of higher education.  

I mean, somewhat. But more to the point, it's a demographic storm.

The millennial generation is the largest in history. We're also the most urbanized in history. We're hitting the point where we're making more money and want houses, and we're doing this after a ~10 year dip in house building from the 2008 crisis, when the available labor pool is depressed from the 2008 crisis. So... those factors don't have a lot to do with any policy. Sometimes history just happens. Furthermore, this happens in a time of consolidation, where many builders or financers are owned by hedge funds, who are leery of overbuilding and ruining their investment. So just like oil, it's gonna be a slow steady increase in supply instead of a precipitous building boom followed by a crash which is what we'd likely see in the past. 

On 7/12/2022 at 5:53 AM, Akkula said:

It isn't like there isn't plenty of land in the USA.  Who is going to be the first person to guy a giant corn field somewhere and incorporate it and make a city and housing like they built after WWII for all the returning service members.  When will someone create a walkable city with small grocery stores like most of the rest of the world enjoys?  

OK akkula. 

First off, a lot of the land in the US sucks donkey balls. The West is effectively uninhabitable to agriculture outside of massive civil engineering infrastructure. the South was too hot and too diseased for many cities before modern medicine and A/C. There's a reason why the North was so much more populous than the geographically similar South and why the border states were some of the most populous during the Civil War. 

Secondly, we already have that. There are walkable cities all over the place. Wellington. Worland. I'm in Etowah, TN right now - perfectly walkable. Shoot, Laramie is pretty damn walkable, although on the larger end of that. There are thousands of cities under 10,000 "in the middle of cornfields " that are walkable as hell.

They're also depressing as hell. No jobs, mostly old people, no growth, often small minded. They suffer massive brain drain. Gay kids get bullied and leave or kill themselves. Teen pregnancy is super high. Dollar general stores everywhere. Drug addiction, run down houses... They're economic death traps.

The trend of "only cities are economic" has been ramping up and it really increases the pressure on housing in the ~10-20 metros that are absolutely murdering it. Seattle, Portland, the Bay, Socal. Boise, SLC, Denver. Austin, Nashville, Charlotte, Raleigh/Durham. Boston, NYC, DC. Their housing issues are caused by massive economic success; there's more jobs than they have housing for people, so housing is going nuts. Unlike say Singapore or Stockholm, they don't have the autonomy or tax revenue to develop their own housing policy and have housing projects tailored to their own region, and unlike Amsterdam, they again lack that autonomy to re-design their city from car focused to pedestrian focused. 

On 7/12/2022 at 5:53 AM, Akkula said:

This isn't Japan with only limited space/land.  It really baffle my mind as to why housing is so expensive in the USA.  It doesn't make sense.  

In fact, California probably has less useful land than Japan. Japan has water - the driest part of Japan is comparable to Portland or Seattle. Cali.... does not. 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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On 7/12/2022 at 6:38 AM, happycamper said:

Ok akkula. here are my thoughts on this.

Yes, regulatory burden increases the cost of home building. However it increases the cost of existing homes more. How? a couple ways.

First, it really really slows down construction. So when there are booms, it's difficult to ramp up demand to match; the construction delay is such that construction isn't responsive.

Furthermore, it makes it very difficult to do stuff like build a one bedroom mother in law suite on your own land. If you look at any American city, almost all old neighborhoods have additions added to houses, generally by the homeowner, and generally not permitted. That's impossible today, and navigating a permit for an addition or ADU is almost impossible for a homeowner not looking for a ~5,000 dollar consulting fee. The additional burden in terms of services and time and inconvenience is higher for these lower-cost items than for almost anything else. 

This is true. The average size of a constructed house has exploded. There's a large market for smaller houses, but they're less profitable than large houses. Hell, large vacation cabins are even more profitable, so labor is pointed towards building housing that does not help the housing crisis. Simple fixes, like requiring a minimum number of small houses or affordable houses per development, maximum lot sizes, etc. are anathemas as they might affect property value. So, the top 20% of homeowners get richer as the bottom 80% of Americans struggle more and more. Zoning, instead of acting as a tool of urban planning, is instead entirely captured by the interests of those who are already fine. 

So homeowners are caught between over-regulating not letting them have cheap housing... and over-regulating outright not allowing cheap housing. 

Yep pretty much. Right now the only way to get affordable housing constructed is with government funds. The mishmash of state and local and federal governments have accidentally conspired to make building affordable housing uneconomical. The market is severely distorted. 

So... Costa Rica is not the United States.

First off, in my brief 2 minute research on Costa Rica, the seismic there is about what it was in Wenatchee - so wind will always control single story residences. You don't need those engineered, because the IRC provides proscriptive design. So that's nice and easy.

Second off, a lot of the things that are cheaper are because of Costa Rica's climate and geology.

Foundations? Costa Rica is volcanic and in general younger than a lot of the US. Expansive soils are less of an issue. Costa Rica has no freezing, so frost depth just isn't a thing. You can't just have a pre-engineered pillar and slab foundation in the US. 

Plumbing? Costa Rica doesn't freeze. You don't have to insulate/bury pipes. You don't have to insulate sewage. Costa Rica is fairly hilly so sewer is easy. CR is densely populated in the central valley, so water utilities are economical by scale. If you try to mcgyver plumbing in most of the US like that, you'll end up with burst pipes and a ruined house. It's just more expensive to build.

Electrical? CR's electrical... leaves something to be desired. Plus, there's no heater in a house. There's no AC. The shower is a nightmare suicide machine. All you really need is power for lights, fridge, stove. It doesn't get hot enough to need AC. It doesn't get cold enough to need heat. It's just... whatever.

Insulation? See above. Confined masonry and adobe have large enough thermal masses that they regulate heat. Fans for night time are enough. That's a lot - a lot - less cost. 

Construction quality? If your windows and doors leak in the US, that's up to hundreds of dollars more a month in heating costs. In Costa Rica it just means you need to burn those little green anti mosquito thingies. 

A 1-bedroom house in Costa Rica has more or less the same construction requirements and quality as a tool shed in the US. And... lo and behold, that's about 2500 bucks. add a little bit for electric and plumbing, maybe some wall finishes, and you're right on.

Except there is nowhere in the US maybe outside of Hawaii that has the combination of climate, soil, water, and density that lets CR be that cheap to live, and I do not believe that Hawaii has the regulatory environment to realize how much cheaper housing could be. 

I mean, somewhat. But more to the point, it's a demographic storm.

The millennial generation is the largest in history. We're also the most urbanized in history. We're hitting the point where we're making more money and want houses, and we're doing this after a ~10 year dip in house building from the 2008 crisis, when the available labor pool is depressed from the 2008 crisis. So... those factors don't have a lot to do with any policy. Sometimes history just happens. Furthermore, this happens in a time of consolidation, where many builders or financers are owned by hedge funds, who are leery of overbuilding and ruining their investment. So just like oil, it's gonna be a slow steady increase in supply instead of a precipitous building boom followed by a crash which is what we'd likely see in the past. 

OK akkula. 

First off, a lot of the land in the US sucks donkey balls. The West is effectively uninhabitable to agriculture outside of massive civil engineering infrastructure. the South was too hot and too diseased for many cities before modern medicine and A/C. There's a reason why the North was so much more populous than the geographically similar South and why the border states were some of the most populous during the Civil War. 

Secondly, we already have that. There are walkable cities all over the place. Wellington. Worland. I'm in Etowah, TN right now - perfectly walkable. Shoot, Laramie is pretty damn walkable, although on the larger end of that. There are thousands of cities under 10,000 "in the middle of cornfields " that are walkable as hell.

They're also depressing as hell. No jobs, mostly old people, no growth, often small minded. They suffer massive brain drain. Gay kids get bullied and leave or kill themselves. Teen pregnancy is super high. Dollar general stores everywhere. Drug addiction, run down houses... They're economic death traps.

The trend of "only cities are economic" has been ramping up and it really increases the pressure on housing in the ~10-20 metros that are absolutely murdering it. Seattle, Portland, the Bay, Socal. Boise, SLC, Denver. Austin, Nashville, Charlotte, Raleigh/Durham. Boston, NYC, DC. Their housing issues are caused by massive economic success; there's more jobs than they have housing for people, so housing is going nuts. Unlike say Singapore or Stockholm, they don't have the autonomy or tax revenue to develop their own housing policy and have housing projects tailored to their own region, and unlike Amsterdam, they again lack that autonomy to re-design their city from car focused to pedestrian focused. 

In fact, California probably has less useful land than Japan. Japan has water - the driest part of Japan is comparable to Portland or Seattle. Cali.... does not. 

One of the biggest costs to affordable housing is the cost of land.  If you can't buy a piece of land for $5k then you aren't going to be able to build an affordable "bootstrap" type of house.   Yes, there are places in the Midwest, for example, where you can buy a cheap house but the house is actually more trouble than it is worth and they pay you because you have to knock it down anyway.  To actually redevelop and put something new there would damn near cost you as much to do that in a desirable area anyway.   But people who CAN move (like those who work online) need to move to less expensive areas if they want a better life and the fun cultural experiences and secondary jobs would follow them eventually.

It really needs to be done on a massive scale to some extent where a state or the federal government sets aside a large swath of land for a new type of higher density development, I think.  Someone has to lead.

I recognize that the US and CR have different circumstances and US construction needs to be more robust because of climate but a lot of the prices have to do with "over the top" regulation, permitting, zoning, etc.  Most affordable housing should be about the size as a small ADU granny casita in your backyard.  But I have found that pricing on these tiny homes are well north of $100k even if you have land to put it on already.  The fixed up front costs regardless of the structure size are so high in the USA it is almost silly not to just expand square footage because the marginal cost is pretty low once you have gone through the pain to actually get it permitted, engineered, architectural plans etc. 

I also think the over reliance on timber framing in the USA is a big problem.  It is inefficient to build that way because it requires a lot of steps and contractors to actually finish the project.  The insulation has to be done, the structure won't hold itself up without framing, etc.  I think it is much better to build a concrete box where you can "bootstrap" and finish the interior yourself if you want.  I like the ICF system because you get an energy efficient box. 

Soil conditions and water are a problem but someone should easily be able to drill helical piers for a small house for not much money.  Maybe that should just be standard if someone was just stamping out 500 sq foot houses.  You have an insulated concrete box with a solid foundation.  Why can't Nebraska set aside some cornfields near the interstate and put some super fast high speed internet and drill down to the aquifer? 

If you put up a development with 1000 small houses it is just a matter of time before you get bars, restaurants, etc., that want to take over.  Perhaps Detroit needs to destroy half of the city and cut the size of the lots down significantly and start to redevelop.  I don't know.

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On 7/12/2022 at 10:03 AM, Akkula said:

One of the biggest costs to affordable housing is the cost of land.  If you can't buy a piece of land for $5k then you aren't going to be able to build an affordable "bootstrap" type of house.   Yes, there are places in the Midwest, for example, where you can buy a cheap house but the house is actually more trouble than it is worth and they pay you because you have to knock it down anyway.  To actually redevelop and put something new there would damn near cost you as much to do that in a desirable area anyway.   But people who CAN move (like those who work online) need to move to less expensive areas if they want a better life and the fun cultural experiences and secondary jobs would follow them eventually.

It really needs to be done on a massive scale to some extent where a state or the federal government sets aside a large swath of land for a new type of higher density development, I think.  Someone has to lead.

I recognize that the US and CR have different circumstances and US construction needs to be more robust because of climate but a lot of the prices have to do with "over the top" regulation, permitting, zoning, etc.  Most affordable housing should be about the size as a small ADU granny casita in your backyard.  But I have found that pricing on these tiny homes are well north of $100k even if you have land to put it on already.  The fixed up front costs regardless of the structure size are so high in the USA it is almost silly not to just expand square footage because the marginal cost is pretty low once you have gone through the pain to actually get it permitted, engineered, architectural plans etc. 

I also think the over reliance on timber framing in the USA is a big problem.  It is inefficient to build that way because it requires a lot of steps and contractors to actually finish the project.  The insulation has to be done, the structure won't hold itself up without framing, etc.  I think it is much better to build a concrete box where you can "bootstrap" and finish the interior yourself if you want.  I like the ICF system because you get an energy efficient box. 

Soil conditions and water are a problem but someone should easily be able to drill helical piers for a small house for not much money.  Maybe that should just be standard if someone was just stamping out 500 sq foot houses.  You have an insulated concrete box with a solid foundation.  Why can't Nebraska set aside some cornfields near the interstate and put some super fast high speed internet and drill down to the aquifer? 

If you put up a development with 1000 small houses it is just a matter of time before you get bars, restaurants, etc., that want to take over.  Perhaps Detroit needs to destroy half of the city and cut the size of the lots down significantly and start to redevelop.  I don't know.

sigh. akkula.

On 7/12/2022 at 10:03 AM, Akkula said:

One of the biggest costs to affordable housing is the cost of land.  If you can't buy a piece of land for $5k then you aren't going to be able to build an affordable "bootstrap" type of house.   Yes, there are places in the Midwest, for example, where you can buy a cheap house but the house is actually more trouble than it is worth and they pay you because you have to knock it down anyway.  To actually redevelop and put something new there would damn near cost you as much to do that in a desirable area anyway.   But people who CAN move (like those who work online) need to move to less expensive areas if they want a better life and the fun cultural experiences and secondary jobs would follow them eventually.

first off.

the land cost in our first house was ~30k. the house was over 80 percent the cost of the purchase. that's pretty typical. In places with very high land prices, typically construction costs are astronomical as well due to labor costs, construction requirements, etc. The cost to actually build a house, before the 2021 housing surge, was more than buying an existing, at least for Washington. Because of that, housing might go down/the growth might slow, but in much of the country outside madness zones like Boise or Las Vegas, the bubble won't pop the way it did in 2008. 

Secondly. people are movign to less expensive areas. they're just all moving to the same ones. why do you think bozeman real estate exploded? it just was too few people to alleviate real estate issues in CA and too many for Bozeman to absorb. so now you have issues in two places. 

third. "desirable" is there because there are jobs. I don't give a shit how many houses you build outside of detroit. there are empty houses there already because there aren't jobs. 

On 7/12/2022 at 10:03 AM, Akkula said:

It really needs to be done on a massive scale to some extent where a state or the federal government sets aside a large swath of land for a new type of higher density development, I think.  Someone has to lead.

So soviet style relocation? I'm shocked.

secondly, "high density development" is economical only when there is, uh, a critical population mass. look to portland, not to brasilia. 

On 7/12/2022 at 10:03 AM, Akkula said:

I recognize that the US and CR have different circumstances and US construction needs to be more robust because of climate but a lot of the prices have to do with "over the top" regulation, permitting,

zoning, etc.

For construction costs? not really, akkula. I just lined it out for you. 

On 7/12/2022 at 10:03 AM, Akkula said:

  Most affordable housing should be about the size as a small ADU granny casita in your backyard. 

I mean, this is wild, because it basically says "poor people don't get to have children". There's plenty of 3 bed 1 bath 900 square foot houses built in the '50s. thats a pretty good model. 

On 7/12/2022 at 10:03 AM, Akkula said:

But I have found that pricing on these tiny homes are well north of $100k even if you have land to put it on already.  The fixed up front costs regardless of the structure size are so high in the USA it is almost silly not to just expand square footage because the marginal cost is pretty low once you have gone through the pain to actually get it permitted, engineered, architectural plans etc. 

That's what I just said man. 

On 7/12/2022 at 10:03 AM, Akkula said:

I also think the over reliance on timber framing in the USA is a big problem.  It is inefficient to build that way because it requires a lot of steps and contractors to actually finish the project. 

Akkula who are you talking to lmfao don't spout this nonsense at me

no, timber framing is not "inefficient". It was adopted because it is extremely efficient. It's faster than other construction methods. It requires less material. It requires far less skill. Prior to the invention of light framed construction you needed master carpenters- called homewrights - who could cut mortise and tenon post and beam houses. Required far more labor, more labor skill, and larger timbers - which are more and more expensive now as old growth is gone and all the chestnuts got fungus murdered. 

for light framed construction you have framers, roofers, and all the other trades. 

for concrete you have concrete guys, roofers, and all the other trades.

for masonry you have masons, roofers, and all the other trades.

for cold form you have cold formed, roofers, and all the other trades.

and light frame is much easier to insulate.

and light frame is better in seismic.

and light frame has a much lower carbon footprint

On 7/12/2022 at 10:03 AM, Akkula said:

The insulation has to be done, the structure won't hold itself up without framing, etc. 

lmfao do you think concrete is an insulator or that concrete structures have floating roofs or something

On 7/12/2022 at 10:03 AM, Akkula said:

I think it is much better to build a concrete box where you can "bootstrap" and finish the interior yourself if you want.  I like the ICF system because you get an energy efficient box. 

you are wrong. icf costs more in terms of labor and materials. it's also a carbon disaster. it is much harder to "bootstrap" through set concrete than it is through drywall and osb. for that matter, as I already stated, "bootstrapping" in the US is not possible compared to Costa Rica. 

On 7/12/2022 at 10:03 AM, Akkula said:

Soil conditions and water are a problem but someone should easily be able to drill helical piers for a small house for not much money. 

It is not lmfao akkula. 

helical piers are expensive. they require grade beams above, which would actually require engineering. they don't work in all soil types. they have to be torqued to a minimum level, which means that if you pick poorly, you can spin them forever. they need a specialty contractor. helical pier production would not be able to handle this surge of demand, so they're even more expensive. helical piers are terrible in expansive soil, they're a giant helix that the whole soil can push up on. 

On 7/12/2022 at 10:03 AM, Akkula said:

Maybe that should just be standard if someone was just stamping out 500 sq foot houses.  You have an insulated concrete box with a solid foundation.  Why can't Nebraska set aside some cornfields near the interstate and put some super fast high speed internet and drill down to the aquifer? 

akkula. concrete boxes are heavy. heavy means seismic is worse. heavy means transportation is more. concrete insulates poorly, so instead of insulation happening in the wall cavity, you lose that area in the structure. housing in butt+++++ nebraska is already cheap. why would people live in 500 square foot shitboxes in the middle of nowhere when there are beautiful 2500 square foot houses available for 140 grand lol https://www.zillow.com/homedetails/502-E-6th-St-Hastings-NE-68901/107117465_zpid/

For that matter the ogalala is drying up. so you're putting people out where there isn't people in houses that don't need to be there mining fossil water in a place that already has a water resource issue in a state nobody is moving to already. 

we don't need more cheap density in nebraska. we need more cheap density in nashville, in atlanta, in kc, in pittsburgh, in charlotte. we already have it in philly and nyc and boston. 

On 7/12/2022 at 10:03 AM, Akkula said:

If you put up a development with 1000 small houses it is just a matter of time before you get bars, restaurants, etc., that want to take over.  Perhaps Detroit needs to destroy half of the city and cut the size of the lots down significantly and start to redevelop.  I don't know.

this is completely untrue as you prove in your very next statement lmao. because if this were true, then detroit would have never had the vacancy issue they have today.

and oh yeah. tearing down houses and starting over on that lot is a lot more expensive than building on a virgin lot. 

akkula. we don't need soviet shitboxes in the middle of nowhere. we need more cheap housing where there are jobs. that's why it is a thorny issue, because nimby people in those areas are aghast at the idea that their house might be worth 1% less. so no cheap housing is built where the people actually are. you can't arbeit macht frei away homelessness. 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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On 7/12/2022 at 5:38 AM, happycamper said:

 In fact, California probably has less useful land than Japan. Japan has water - the driest part of Japan is comparable to Portland or Seattle. Cali.... does not. 

We have water. We just use more of it than we have.

Planning is an exercise of power, and in a modern state much real power is suffused with boredom. The agents of planning are usually boring; the planning process is boring; the implementation of plans is always boring. In a democracy boredom works for bureaucracies and corporations as smell works for skunk. It keeps danger away. Power does not have to be exercised behind the scenes. It can be open. The audience is asleep. The modern world is forged amidst our inattention.

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On 7/12/2022 at 10:44 AM, smltwnrckr said:

We have water. We just use more of it than we have.

i mean... give 20 guys 25,000 calories a day, and they have food. they also just don't have enough; if you said they "don't have food" not many would disagree. that's california. while japan is a similar sized room with 80 guys and 200,000 calories a day. so more crowded, i guess, but also with the resources to expand. 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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On 7/12/2022 at 7:49 AM, happycamper said:

i mean... give 20 guys 25,000 calories a day, and they have food. they also just don't have enough; if you said they "don't have food" not many would disagree. that's california. while japan is a similar sized room with 80 guys and 200,000 calories a day. so more crowded, i guess, but also with the resources to expand. 

I mean, if those 20 guys were taking about 10,000 of those calories, packaging them up and sending them to places like Ohio and China, and every few years they got about a mlion of them to set aside, the analogy might hold. 

Planning is an exercise of power, and in a modern state much real power is suffused with boredom. The agents of planning are usually boring; the planning process is boring; the implementation of plans is always boring. In a democracy boredom works for bureaucracies and corporations as smell works for skunk. It keeps danger away. Power does not have to be exercised behind the scenes. It can be open. The audience is asleep. The modern world is forged amidst our inattention.

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On 7/12/2022 at 5:38 AM, happycamper said:

In fact, California probably has less useful land than Japan. Japan has water - the driest part of Japan is comparable to Portland or Seattle. Cali.... does not. 

And aside from water availability there’s topography. In San Diego County there is no more flat land. The only new development is in the foothills in areas of extreme fire risk. Housing prices reflect this. 

Thay Haif Said: Quhat Say Thay? Lat Thame Say

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On 7/12/2022 at 11:03 AM, smltwnrckr said:

I mean, if those 20 guys were taking about 10,000 of those calories, packaging them up and sending them to places like Ohio and China, and every few years they got about a mlion of them to set aside, the analogy might hold. 

no. No! now you're mixing up calories and water. in this case calories are water. calories aren't calories! 

so to mercilessly stretch our analogy in california those dudes only produce ~ 1200 calories each. so they import 1500 calories each from neighboring... rooms. yeah. and they export... power... to those and other neighboring rooms. power that they generate by using pelotons with magnets to generate power. so they need the.. imported calories... to make the... power... to sell to other states. rooms! shit. rooms. 

and also somehow it's only like 2 guys riding the peloton and they do it like 16 hours a day and so they eat 30,000 calories a day each and also they have about as much voting power in the room as the other 18 guys combined, mostly cause it's real easy to get the two similar guys to agree but also because they make the power and get more calories. or something

and then there are arguments that hey in other rooms you can just, like, make power. not all year, but you don't need to import calories to make power.

and they're like SCREW YOU I WANT POWER ALL YEAR

so california room is perpetually short of... calories.... because of those two guys and the desires of other rooms. despite the fact that otherwise they'd be fine. 

anyway and japan room is like well we have plenty of calories but really have to conserve power. but we can't send any of our calories over there. they're like... only pawpaw fruit or something. 

Remember that every argument you have with someone on MWCboard is actually the continuation of a different argument they had with someone else also on MWCboard. 

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On 7/12/2022 at 8:35 AM, happycamper said:

no. No! now you're mixing up calories and water. in this case calories are water. calories aren't calories! 

so to mercilessly stretch our analogy in california those dudes only produce ~ 1200 calories each. so they import 1500 calories each from neighboring... rooms. yeah. and they export... power... to those and other neighboring rooms. power that they generate by using pelotons with magnets to generate power. so they need the.. imported calories... to make the... power... to sell to other states. rooms! shit. rooms. 

and also somehow it's only like 2 guys riding the peloton and they do it like 16 hours a day and so they eat 30,000 calories a day each and also they have about as much voting power in the room as the other 18 guys combined, mostly cause it's real easy to get the two similar guys to agree but also because they make the power and get more calories. or something

and then there are arguments that hey in other rooms you can just, like, make power. not all year, but you don't need to import calories to make power.

and they're like SCREW YOU I WANT POWER ALL YEAR

so california room is perpetually short of... calories.... because of those two guys and the desires of other rooms. despite the fact that otherwise they'd be fine. 

anyway and japan room is like well we have plenty of calories but really have to conserve power. but we can't send any of our calories over there. they're like... only pawpaw fruit or something. 

In california, we use water to literally make calories so it all gets very confusing.

I am making the point that is often missed on out-of-state folks who associate California's water use exclusively with the Colorado River. We could cut all imports tomorrow and still have enough water in the state through the CVP and the SWP to supply residential use.

My home region would become a desolate wasteland, but maybe it should be? I'm conflicted. 

Anyways, I'm just being a pain in the ass while making a bit of a pointless point. 

Planning is an exercise of power, and in a modern state much real power is suffused with boredom. The agents of planning are usually boring; the planning process is boring; the implementation of plans is always boring. In a democracy boredom works for bureaucracies and corporations as smell works for skunk. It keeps danger away. Power does not have to be exercised behind the scenes. It can be open. The audience is asleep. The modern world is forged amidst our inattention.

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On 7/12/2022 at 8:35 AM, happycamper said:

no. No! now you're mixing up calories and water. in this case calories are water. calories aren't calories! 

so to mercilessly stretch our analogy in california those dudes only produce ~ 1200 calories each. so they import 1500 calories each from neighboring... rooms. yeah. and they export... power... to those and other neighboring rooms. power that they generate by using pelotons with magnets to generate power. so they need the.. imported calories... to make the... power... to sell to other states. rooms! shit. rooms. 

and also somehow it's only like 2 guys riding the peloton and they do it like 16 hours a day and so they eat 30,000 calories a day each and also they have about as much voting power in the room as the other 18 guys combined, mostly cause it's real easy to get the two similar guys to agree but also because they make the power and get more calories. or something

and then there are arguments that hey in other rooms you can just, like, make power. not all year, but you don't need to import calories to make power.

and they're like SCREW YOU I WANT POWER ALL YEAR

so california room is perpetually short of... calories.... because of those two guys and the desires of other rooms. despite the fact that otherwise they'd be fine. 

anyway and japan room is like well we have plenty of calories but really have to conserve power. but we can't send any of our calories over there. they're like... only pawpaw fruit or something. 

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On 7/12/2022 at 11:39 AM, smltwnrckr said:

In california, we use water to literally make calories so it all gets very confusing.

I am making the point that is often missed on out-of-state folks who associate California's water use exclusively with the Colorado River. We could cut all imports tomorrow and still have enough water in the state through the CVP and the SWP to supply residential use.

My home region would become a desolate wasteland, but maybe it should be? I'm conflicted. 

Anyways, I'm just being a pain in the ass while making a bit of a pointless point. 

no, I think it bears keeping in mind that california has plenty of water for residential use and even massive agricultural use. it just doesn't have enough water to satisfy the agricultural demand of the rest of the country. from grapes to vegetables to nuts to herbs. california's water shortage is a direct consequence of california's enormous agricultural machine and california's enormous agricultural machine is built on equal parts being relatively the garden of eden (thanks steinbeck) and the huge demand for its products. every time i cook with garlic and snack on almonds i am using more California water than you do in a day

and it RULEZ 😈

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On 7/12/2022 at 8:43 AM, happycamper said:

no, I think it bears keeping in mind that california has plenty of water for residential use and even massive agricultural use. it just doesn't have enough water to satisfy the agricultural demand of the rest of the country. from grapes to vegetables to nuts to herbs. california's water shortage is a direct consequence of california's enormous agricultural machine and california's enormous agricultural machine is built on equal parts being relatively the garden of eden (thanks steinbeck) and the huge demand for its products. every time i cook with garlic and snack on almonds i am using more California water than you do in a day

and it RULEZ 😈

Yes, and there have also been more recent changes in the massive ag machine that makes it even tougher to deal with the water issues. 

Planning is an exercise of power, and in a modern state much real power is suffused with boredom. The agents of planning are usually boring; the planning process is boring; the implementation of plans is always boring. In a democracy boredom works for bureaucracies and corporations as smell works for skunk. It keeps danger away. Power does not have to be exercised behind the scenes. It can be open. The audience is asleep. The modern world is forged amidst our inattention.

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On 7/12/2022 at 8:38 AM, happycamper said:

Ok akkula. here are my thoughts on this.

Yes, regulatory burden increases the cost of home building. However it increases the cost of existing homes more. How? a couple ways.

First, it really really slows down construction. So when there are booms, it's difficult to ramp up demand to match; the construction delay is such that construction isn't responsive.

Furthermore, it makes it very difficult to do stuff like build a one bedroom mother in law suite on your own land. If you look at any American city, almost all old neighborhoods have additions added to houses, generally by the homeowner, and generally not permitted. That's impossible today, and navigating a permit for an addition or ADU is almost impossible for a homeowner not looking for a ~5,000 dollar consulting fee. The additional burden in terms of services and time and inconvenience is higher for these lower-cost items than for almost anything else. 

This is true. The average size of a constructed house has exploded. There's a large market for smaller houses, but they're less profitable than large houses. Hell, large vacation cabins are even more profitable, so labor is pointed towards building housing that does not help the housing crisis. Simple fixes, like requiring a minimum number of small houses or affordable houses per development, maximum lot sizes, etc. are anathemas as they might affect property value. So, the top 20% of homeowners get richer as the bottom 80% of Americans struggle more and more. Zoning, instead of acting as a tool of urban planning, is instead entirely captured by the interests of those who are already fine. 

So homeowners are caught between over-regulating not letting them have cheap housing... and over-regulating outright not allowing cheap housing. 

Yep pretty much. Right now the only way to get affordable housing constructed is with government funds. The mishmash of state and local and federal governments have accidentally conspired to make building affordable housing uneconomical. The market is severely distorted. 

So... Costa Rica is not the United States.

First off, in my brief 2 minute research on Costa Rica, the seismic there is about what it was in Wenatchee - so wind will always control single story residences. You don't need those engineered, because the IRC provides proscriptive design. So that's nice and easy.

Second off, a lot of the things that are cheaper are because of Costa Rica's climate and geology.

Foundations? Costa Rica is volcanic and in general younger than a lot of the US. Expansive soils are less of an issue. Costa Rica has no freezing, so frost depth just isn't a thing. You can't just have a pre-engineered pillar and slab foundation in the US. 

Plumbing? Costa Rica doesn't freeze. You don't have to insulate/bury pipes. You don't have to insulate sewage. Costa Rica is fairly hilly so sewer is easy. CR is densely populated in the central valley, so water utilities are economical by scale. If you try to mcgyver plumbing in most of the US like that, you'll end up with burst pipes and a ruined house. It's just more expensive to build.

Electrical? CR's electrical... leaves something to be desired. Plus, there's no heater in a house. There's no AC. The shower is a nightmare suicide machine. All you really need is power for lights, fridge, stove. It doesn't get hot enough to need AC. It doesn't get cold enough to need heat. It's just... whatever.

Insulation? See above. Confined masonry and adobe have large enough thermal masses that they regulate heat. Fans for night time are enough. That's a lot - a lot - less cost. 

Construction quality? If your windows and doors leak in the US, that's up to hundreds of dollars more a month in heating costs. In Costa Rica it just means you need to burn those little green anti mosquito thingies. 

A 1-bedroom house in Costa Rica has more or less the same construction requirements and quality as a tool shed in the US. And... lo and behold, that's about 2500 bucks. add a little bit for electric and plumbing, maybe some wall finishes, and you're right on.

Except there is nowhere in the US maybe outside of Hawaii that has the combination of climate, soil, water, and density that lets CR be that cheap to live, and I do not believe that Hawaii has the regulatory environment to realize how much cheaper housing could be. 

I mean, somewhat. But more to the point, it's a demographic storm.

The millennial generation is the largest in history. We're also the most urbanized in history. We're hitting the point where we're making more money and want houses, and we're doing this after a ~10 year dip in house building from the 2008 crisis, when the available labor pool is depressed from the 2008 crisis. So... those factors don't have a lot to do with any policy. Sometimes history just happens. Furthermore, this happens in a time of consolidation, where many builders or financers are owned by hedge funds, who are leery of overbuilding and ruining their investment. So just like oil, it's gonna be a slow steady increase in supply instead of a precipitous building boom followed by a crash which is what we'd likely see in the past. 

OK akkula. 

First off, a lot of the land in the US sucks donkey balls. The West is effectively uninhabitable to agriculture outside of massive civil engineering infrastructure. the South was too hot and too diseased for many cities before modern medicine and A/C. There's a reason why the North was so much more populous than the geographically similar South and why the border states were some of the most populous during the Civil War. 

Secondly, we already have that. There are walkable cities all over the place. Wellington. Worland. I'm in Etowah, TN right now - perfectly walkable. Shoot, Laramie is pretty damn walkable, although on the larger end of that. There are thousands of cities under 10,000 "in the middle of cornfields " that are walkable as hell.

They're also depressing as hell. No jobs, mostly old people, no growth, often small minded. They suffer massive brain drain. Gay kids get bullied and leave or kill themselves. Teen pregnancy is super high. Dollar general stores everywhere. Drug addiction, run down houses... They're economic death traps.

The trend of "only cities are economic" has been ramping up and it really increases the pressure on housing in the ~10-20 metros that are absolutely murdering it. Seattle, Portland, the Bay, Socal. Boise, SLC, Denver. Austin, Nashville, Charlotte, Raleigh/Durham. Boston, NYC, DC. Their housing issues are caused by massive economic success; there's more jobs than they have housing for people, so housing is going nuts. Unlike say Singapore or Stockholm, they don't have the autonomy or tax revenue to develop their own housing policy and have housing projects tailored to their own region, and unlike Amsterdam, they again lack that autonomy to re-design their city from car focused to pedestrian focused. 

In fact, California probably has less useful land than Japan. Japan has water - the driest part of Japan is comparable to Portland or Seattle. Cali.... does not. 

 

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