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The office of business management list Greater Houston metro as over 10k sq miles so we can keep slicing the data but the amount of land available is in favor of Houston metro
I live in Orange County California where the median home price is $645K. I just visited Houston last week and many of my relatives bought new homes for around $150K. In the OC, even if you have the land, the cost of building a new home is about $300K to $400K. I notice the built quality is not as good in Houston but why the building cost difference is so much?
Taxes, regulations and insurance costs. Simple as that. That's what the liberals in your state have done...taxed and regulated you to death.
What it really comes down to, is Texas does not have the highly inflated prices of so many other places. For example, the cost of the land to build on. In the Silicon valley they may buy a 50 year old home for $750,000 then tear it down just to find a building lot. In Texas their is a lot more available land to build on, so their lot prices are still reasonable.
Southern California also uses a lot of Hispanic labor to build homes, just as Texas does, so it is not the reason as some have mentioned.
California has some extra costs when building, as you are building in a earthquake zone, and they require some higher priced construction that is not required in Texas.
Materials are often cheaper in Texas.
A big thing is, in California they have inflated prices out of reason to the point that builders take the price of similar homes into consideration, then price to take advantage of that factor and their prices relate to the price of used homes.
There are plenty of skilled illegals in the construction field. Being here illegally doesn't mean they aren't skilled. Just means they are illegal. And contractors do hire illegals because they can pay them less and nobody complains. Unless you guys are in the trades most of you know crap about illegals, contractors and quality of work.
Here is how it is
Most large contractors can't afford the liability of hiring illegals. Doesn't mean some don't skirt the issue and do it anyway. Sub contractors or small contractors can and do hire illegals for anything from general labor to skilled work
100% of the companies I have worked for do run a check on legality of work status.
So while some small contractors don't do anything in checking , the larger companies do.
Last edited by Electrician4you; 07-26-2016 at 07:08 PM..
I found a few brand new constructions in Houston for under $150k. Pretty sure OP's relatives are referring to these. I'd be interested to know how the developer make money. Cost to build must be super low in Houston. Perhaps a friendly building approval process is part of the reason.
The office of business management list Greater Houston metro as over 10k sq miles so we can keep slicing the data but the amount of land available is in favor of Houston metro
Both are fedgov agencies. The argument over which is less influenced by politics would probably be endless. I 'll stick with the Census Data, but others obviously have a different viewpoint. Obviously available land is more plentiful in the Houston area. The point I was making is that the difference, while quite significant, isn't quite as extreme as your post indicated.
Most construction in Texas is done by subs. Everything from new construction to roofing, flooring, etc.
We had a downturn due to oil industry and savings and loan debacle in the mid 80s. It lasted a long time.
The trades had to move to get work. They never came home. When building picked up, thee was a giant hole to fill. It was filled with citizens of Hispanic descent hiring their cousins. Only the owner of the company needs a 1099.
I haven't seen a response in this Houston vs California thread that fully explains the construction cost difference. Some of the posts go off on a wild tangent about property taxes and land cost which have nothing at all to do with apples vs apples end user building costs.
I think it's a bunch of things:
* Earthquakes. California building code requires an engineering sign off on the design and inspections as the home is being built. A set of Houston architect plans would be rejected in California and the California plans would be much more costly to build.
* Overall regulatory costs. This one was covered. Texas is largely a free-for-all. California makes the builder pay for the infrastructure impact of new construction. This is pretty common in the more established/mature parts of the country where they grappled with "build and dash" tract developers decades ago and have adopted regulations that make new construction fully fund the incremental infrastructure costs.
* Sheer competition and economy of scale. If you're tossing up hundreds of nearly identical tract houses and a bunch of other builders are doing the same, they all have the same architect plan. Materials are purchased in bulk. The whole construction cycle has less interruptions since it's such a "production line". The builders also compete against each other and are probably making less profit per unit and making it up on the volume.
* Lower labor costs. Ignoring the whole illegal thing, Texas labor is much cheaper than California labor.
* A market with lower expectations for finish quality. To achieve those low per-square-foot costs, you're substituting materials that cost less than would be accepted in a mature market like California. If you're building a semi-custom home on a $300,000 lot, you're not going to want builder grade level of finish.
I don't live in either of these housing markets so I probably have some of the details wrong but I'd think my list captures most of the reasons why construction costs in Houston are cheaper than California. Where I am in the Great White North, regulations on the thermal envelope and the frost line add a lot of cost. Argon-filled U-0.32 glazing ain't cheap. R-25 walls and R-49 attic add cost. A full basement that is insulated to code adds cost. A heating system that can handle -20F adds cost. A driveway with 18" of crushed stone/stone dust road bed with proper drainage to prevent frost heaves costs money.
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