alt Hacker News> I'm with you up until that. Maybe there are places where you have to build over 2000 sf due to regulations. For the most part, this is an industry talking point to justify building expensive houses on the limited land that gets zoned for residential. It gets repeated a lot.
I kind of feel it is the inverse.
If you can build a house for X$/sqft, you have a linear relationship. If it costs 100k _plus_ X$/sqft (for sewer, permits, etc) now you have a floor. You can sell a bigger house for 600k, or a 35% smaller house for 425k, odds are you’ll sell the bigger house quicker. I bet the 325k homes would sell like beanie babies in the 90s in places like sf.
The actual problem, the elephant in the room, is that California is expensive, both by popularity and regulation. This makes for an embarrassing conundrum where California is simultaneously pushing poor people out while trying to subsidize their life via social programs.
I don’t think it’s working.
> You can sell a bigger house for 600k, or a 35% smaller house for 425k, odds are you’ll sell the bigger house quicker.
Yes, and that's the point I was making in my comment. What's driving the price gap is that you're selling to a group with a much higher capacity to pay when you're building the 2000 sf homes.
But that has nothing to do with it being unprofitable to sell lower-priced homes, it's just less profitable. The talking point makes it sound like the home builders are trying to do good things, but they're victims of the government. No, it's nothing more than a desire to maximize profit, because the folks that are looking for 2000 sf homes are high income households with kids, and they're willing and able to pay a steep premium for that house.