Why Land Prices are Making Homes Out of Reach

Ever felt like housing is becoming way too expensive? You're right, and it's not just because of the pandemic. The truth is, it's more about how much land costs these days. Prices have gone up even faster than housing costs, making land about 40% of what we pay for a home. In big cities like San Jose and Los Angeles, land prices take up nearly three-quarters of the property value! But why is this happening? One reason is that we've got lots of rules about how land can be used. These rules often make it tough and expensive for builders to create more houses. Some places, like the UK and the Netherlands, have such strict rules that they're pushing new construction to far-off areas. And guess what? That just makes land prices go up even more. But there are other ways to handle this. For instance, Japan has kept things pretty simple with their zoning rules. They have 12 types of zones, and if you build something that fits within the rules, you can go ahead. This makes building easier and cheaper. So, what can we do? Maybe it's time to look at these land rules more closely and see if we can make them less complicated. If we do that, we might be able to bring those prices down and make homes more affordable for everyone.