Quote:
Originally Posted by TakeFive
"Talking past each other"
means when two people are seemingly having a conversation but are actually discussing different topics or interpretations of the same topic, without realizing it, leading to misunderstanding and a lack of effective communication; essentially, they are not truly connecting on the same level despite speaking at the same time.
Could I correctly assume that getting rid of Federal regulations that contributes up to 40% of the cost of construction would be a good thing?
By deduction the same would apply at the local level, would it not?
I can't agree with this but admittedly I can't point to the information necessary to confirm my supposition. But I'm gonna guess that what works (or doesn't) in the Quad Cities might be both similar and different from what works (or doesn't) in Ogden Utah. Or on a local level what works for Scottsdale isn't the same as what works for Phoenix because each city has/had different objectives.
With respect to the City of Denver, everybody talks about affordability lacking including the Denver City Council. Then the DCC creates all sorts of rules and regs that make housing (and everything else) LESS affordable.
When it comes to making housing more affordable there are many factors. Cost of construction and cost of land are two biggies. Cost of land goes to "desirability" which is one of the key components. Housing in less desirable areas tends to cost less. Eh, amazing. Desirability also keeps demand high; higher demand means higher prices. And so it goes.
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I don't think we're speaking past each other. What I'm saying is I don't much care what local municipalities have to say anymore and if anyone under the age of 40 does, I hope they wake up soon. Local municipalities have been getting this wrong for 40 years and in doing so, they are significantly decreasing the quality of life for all generations following X'ers. The boomers and X'ers have created this housing disaster and I'm not sure most people understand what a conundrum we, as a nation, are in from a housing cost perspective.
I'll put it into perspective for you. If we were to build housing at the fastest historical pace on record for three years in a row, it would still barely make a dent in the cost of housing. Imagine 2024 delivery levels x2 (adjusted for population growth) for three years. Would housing costs fall moderately in the short term? Yeah, absolutely - maybe 10-15%. Would they fall to a historical level of affordability that boomers and X'ers generally enjoyed relative to income and interest rates? Nope.
My position is government at all levels have been regulating the hell out of our built environment and it's been detrimental to the American experience overall. It's way past time for a significant course correction. I've advocated for it before and I'll do it again...the feds should withhold federal funding of all types to local municipalities who don't ease the regulatory burden.
Fun fact - local permitting, planning, impact, etc types of fees add approximately 10% to the total cost of a project (low end estimate). Simply removing that cost burden could bring down the cost of occupancy of all types. Here's the math:
300 unit project costs $100,000,000 for round math. Take $10 million out of costs and your 8% required return on cost for the two comparable projects is $8mm and $7.2mm. That $800,000 delta on 300 units equates to $222 per month in lower rent (for condos, if we built them, it would be a bit less than this since interest rates are a bit lower).
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