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Study: It's the Land That's Making Housing Expensive
Issi Romem shares a recent study that reveals the fundamental issues driving up the cost of housing in the Coastal cities around the United States. As Romem states it, "[t]he value of the land accounts for most of the value of a home in expensive coastal cities." In short, this study will provide ammunition to YIMBYs and other advocates for density and housing construction, as well as those favoring a land value tax.
The study estimates the ratio of average home value to replacement cost before mapping those estimates by zip code area within metropolitan areas like New York-Newark, NY-NJ-CT-PA and San Jose-San Francisco-Oakland. What the ratios reveal in many of the coastal metropolitan areas is that the high cost of housing is not the result of construction costs. Rather, high housing costs are "driven by the high cost of land which, in turn, reflects a scarcity of zoned units, not a scarcity of land per se." There is so little capacity to build, that housing construction costs have detached from home values.
Romem's post on the Buildzoom site reproduces the study, including an abstract, an explanation of the study's methodology, maps, and downloads of the estimates both by metropolitan area and zip code.