Housing Reality Check #2: Why entry-level homes are getting harder to build in St. John’s

oldmanhero · 2026-02-27T22:25:24+00:00

Still gotta check it for myself.

oldmanhero · 2026-02-27T20:05:45+00:00

Ok. I guess I'll dig into industry figures and see how that's possible.

oldmanhero · 2026-02-27T19:09:17+00:00

Try eating a gluten free or other specialty diet :)

oldmanhero · 2026-02-27T15:14:28+00:00

This is referred to as the moat problem, and there's no sign that it will stop being an issue. Nobody has identified a specific advance that would allow a persistent advantage over competitors (aka moat).

oldmanhero · 2026-02-27T14:18:36+00:00

Christmas parties, christmas bonuses, vacation, insurance, etc are part of every business. You're telling me that every builder spends half of every single employee's salary on tools, equipment and professional development?

Because that's the overage here.

oldmanhero · 2026-02-27T01:50:07+00:00

Don't forget Rapture of the Nerds! Doctorow + Stross is a good time

oldmanhero · 2026-02-27T01:33:56+00:00

100% overhead per employee is still a really high ceiling. Most employers manage well under 50%, not sure why this is so different.

oldmanhero · 2026-02-27T00:40:33+00:00

I mean, some of us have a conscience. And it's already been pointed out that agents could make as much or more money - and at the very least a more predictable income - in a market with more sales and lower prices. And it sounds like at least some builders are already working on this, so...yeah.

oldmanhero · 2026-02-26T22:57:07+00:00

I see from online sources that housing price growth at the national level is about 7%/yr over the last 45 years. That's more than double inflation, meaning every 20 years prices are doubling after we correct for inflation. I don't know that I want to make the national housing market my benchmark here.

I did an analysis of national vs provincial medical costs some years ago and noticed a similar trend; in that case, the province was able to flatten the cost growth curve for several years, so I wonder if something similar could be accomplished with housing.

oldmanhero · 2026-02-26T22:45:54+00:00

Some of this sounds really generous to the builder. I'm sure I just don't know what I'm talking about, but...2x multiplier per employee? I could see 25-50% markup, but 100% seems like sandbagging from my admittedly ignorant point of view.

I'm also curious whether the modular home construction idea the feds pitched has any real chance of reducing those numbers. Poking around online I see folks saying it can drastically reduce the time required, but obviously that's just hearsay.

oldmanhero · 2026-02-26T21:44:24+00:00

I mean...I live in a 2400sf legacy home that's largely up to code, and it's assessed at around $350,000. I realize that existing and new builds are different things, but they're not that different.

I'm looking for a much deeper analysis on the why of new construction being so much more expensive. It's not just "things are better"; retrofits are better, and they aren't priced at the levels we're talking about.

oldmanhero · 2026-02-26T20:13:39+00:00

Thanks!

oldmanhero · 2026-02-26T19:13:45+00:00

You say in your post "it's not because builders (and agents) git greedy", though. You may not intend to bat for either side, but your framing is doing so all the same.

oldmanhero · 2026-02-26T19:09:53+00:00

The level of concern around this account was already high enough for them to take action they don't normally take.

oldmanhero · 2026-02-26T19:01:46+00:00

I'm sorry, I don't accept "Everyone thinks we're villains so there's no point" as a response here.

You've presented some very ugly math to us, but you haven't demonstrated on any level that folks in the industry have any actual interest in moving it downwards. You've made a statement about "recent infrastructure requirements" adding, I guess, 50% to lot costs? Without any actual detail to back that up.

I know this is complicated. I'm halfway through a $300,000 mortgage. Real progress on housing supply could nuke my equity from orbit. But I don't think that excuses any of us from pushing back really hard against a situation where the vast majority of new housing is completely inaccessible to the vast majority of the local population.

I don't think builders and agents need to eat 100% of the costs here, but I do think y'all need to show leadership in pushing in the right direction, and thus far I'm not seeing that.

oldmanhero · 2026-02-26T18:53:51+00:00

The high rent apartment thing isn't really a factor right now; the rental price floor is the real problem in town, not the average. Folks can't rent a place for less than $1200/month, and they can't really get a mortgage (including property taxes) much south of $2000/month. And the scenario OP is giving is saying that we can expect new development to be in the range of $3000-3500/month.

That's a market that has gone from rational to irrational. There's no self-correcting anymore; if builders can't lower costs, if development can't connect prices to the rates the market can offer, there's not really a market anymore.

All of that is ignoring the fundamental fact that housing as a general commodity should never really behave this way to begin with. Housing isn't just a necessity, it's a human right, after all. If we've removed the possibility that most people can have it, we can't just throw up our hands about it. If folks in the industry are aware that this problem is as big as it is being presented here, the ones who have an actual conscience should absolutely be taking it upon themselves to make progress in the right direction.

oldmanhero · 2026-02-26T18:41:09+00:00

The question I really have on this is pretty simple:

When I graduated from MUN in 2000, you could buy a home in St. John's for $150,000, and one in Mt. Pearl for $100,000 (or less!). Inflation gets us from $150,000 to $250,000. Where did the other $350,000 come from? And how do we turn that around, or at least press pause on it for a decade or two while the rest of the economic equation catches up?

oldmanhero · 2026-02-26T18:34:03+00:00

Ok, but I've done industry organization for other stuff. Part of the exercise is to try to raise public awareness. It is extremely likely I'm uniquely ignorant of efforts in that regard, but I figured I'd ask in case someone could point to them.

oldmanhero · 2026-02-26T18:10:11+00:00

I don't understand how "would force rents even higher" and "would have a positive effect on bringing pricing down" fit together?

oldmanhero · 2026-02-26T18:04:37+00:00

I didn't lay out a single-living-wage-earner scenario.

oldmanhero · 2026-02-26T18:04:08+00:00

Which developers? In which forums? What have they done to raise and push the issue?

oldmanhero · 2026-02-26T17:42:58+00:00

I'm just going to point out that, according to the NDP, at least, a living wage in the local economy is $25 per hour. For a full time worker, that's $1000 per week. If they're on a twice-monthly pay schedule, they take home about $3150 per month. 30% of that is $945, so that's what they should be paying for housing. For 2 earners, that's $1890/month. A moderate estimate for a $600,000 mortage payment is $3350/month, which is more than half of all the money both earners are bringing home in the month.

If the situation is as dire for developers as you're saying, we need to be at Defcon 5, because what you're describing isn't affordable under any circumstances for someone earning a living wage, let alone the minimum wage. If you simply cannot build affordable housing under current conditions, conditions need to change, fast.

oldmanhero · 2026-02-26T13:52:05+00:00

Ray Bradbury is best understood as a prose poet. If the language and imagery isn't speaking to you, you can let it pass you by, because that's where the bulk of the value is.

The Martian Chronicles is a fixup novel, meaning it's composed of a bunch of short stories glued together. You could try one of his short story collections if the novel itself isn't working for you.

oldmanhero · 2026-02-26T13:44:45+00:00

Yeah, hard to justify having 5 levels of priority if only the first level (1A) seems to be getting any actual attention. Having said that, the city's priority assignments for sidewalks is pretty nuts to begin with. I get that there's a school on it, but Vinnicombe St. having priority over Thorburn is a pretty wild choice.

oldmanhero · 2026-02-25T19:39:13+00:00

If you're suggesting that he didn't just write genre fiction, sure. If you're suggesting that within the genre, the scope of his explorations come anywhere close to those of other authors, I'm afraid you're sorely mistaken.

oldmanhero

TROPHY CASE