# Land Shortage



## conarb

Bloomberg did a piece today on the shortage of buildable land, looks like the rest of the nation is seeing what we've been going through:



			
				Bloomberg said:
			
		

> This shortage doesn’t affect all the marketable land. “There’s plenty of land in the country, but it’s all in outlying areas far from the job centers. So the demand to buy homes in those outlying areas is lower than usual right now,” Burns says. “And the costs to build have risen.” Developers point to new environmental regulations, understaffed local government offices, and the painful process of obtaining building permits for raw land.
> 
> “It’s the biggest headache you can imagine,” Austin real estate investor Jerred Morris says of the permit process. “It takes a tremendous amount of time and basically ingenuity to know how to weave your way through the offices and get a permit and get things done.”
> 
> Pointon of Capital Economics says that to ***** housing starts, homebuilders are going to need to increase the price they are willing to offer for desirable land. “To do that, they’re going to have to put up the price of the homes they sell or take a hit to their profits,” he says. “And to do that, you have to pull through higher home prices onto consumers, which they may be able to do as earnings rise.” He expects to see the pace of housing starts accelerate in the next few months as that adjustment starts to happen.¹




¹ http://www.bloomberg.com/news/articles/2016-09-08/not-for-sale-the-best-land-in-america


----------



## JBI

While I appreciate that a business must look at 'return on investment', (far) too many fail to realize that 20%, 30% and higher ROI are not a reasonable expectation in the current economic climate. So yes, taking a 'hit' on profits will be the reasonable answer in the short term.


----------



## fatboy

In northern Colorado, the big hit is coming from the cost for developers to bring the necessary raw water rights to the water purveyor, along with the development. Which in our case, the purveyor is the City, and development must pay it's own freight.


----------



## conarb

Address this statement:


> “It’s the biggest headache you can imagine,” Austin real estate investor Jerred Morris says of the permit process. “It takes a tremendous amount of time and basically ingenuity to know how to weave your way through the offices and get a permit and get things done.”



Here are *some pictures of a new home* being built by a former carpenter of mine (He's put them in OneDrive and some of you may not be able to open them), I have built in this AHJ and I know the plan checkers want design to thousand year standards, if you look behind the home in some pictures you'll see a couple of ordinary stick framed homes.  So we now have homes that are over 20 years old adjacent to new homes that cost exponentially more to build because of today's earthquake protection. 

This works for some people able to afford the $1,000 a foot construction but appraisers do not factor in quality in their equations, in this area you are going to get an appraisal of $700 a foot whether you build to these standards or you have an old home not engineered to any earthquake standards at all, just prescriptive code in effect at the time the house was built.


----------



## FLSTF01

That's some pretty heavy-duty framing.


----------



## conarb

FLSTF01 said:


> That's some pretty heavy-duty framing.



That's what we have to do around here, that's a custom home and while multifamily is different it too is crazy, we are getting into multi stud walls to get both ventilation and insulation in the walls.

This is California Silicon Valley, contrast this with what Tiger shows daily in Southern California, we have a state code, but it's enforced differently in differing parts of the state, another good reason to split the state into 6 different states.


----------



## fatboy

That's some awesome framing! True craftsmen doing the work, very, very seldom seen anymore. Nicely done.


----------



## conarb

fatboy said:


> That's some awesome framing! True craftsmen doing the work, very, very seldom seen anymore. Nicely done.


Fatboy:

To give credit where credit is due the carpenter doing the work is Sim Ayres, his company is SBE Builders, he still works with the tools himself along with his sons, the AHJ has a "diverse" building inspector crew and the gal building inspector called one of his sons "cute" when she signed him off.


----------



## Rick18071

Wouldn't be easier just to carve out a space in a huge block of wood?


----------

