Housing: Chosen Scarcity

Started by rcjordan, July 13, 2026, 01:24:19 PM

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rcjordan

Lots of 'Yeah, but(s)' in this one, but worth a read.

Same Capacity. Less Throughput. — laxmena
https://laxmena.com/same-capacity-less-throughput

ergophobe

#1
Yes, a good read.

I haven't read Abundance, but I get the impression this is a bit a caricature of the book. I don't think the authors (I follow both in their writing and podcasts, which is part of why I haven't read the book) have such simplistic views.

> Over the decades, every time something went wrong, somebody added a valve.

I remember reading Joel Spolsky way way back about how software got so expensive. Essentially the story was that MyCorp hires out a software job. It's delivered according to spec, but it actually doesn't work as envisioned. The next contract adds a clause. Then there was the one time that the project manager at the contractor got fired and the project stalled, so Boilerplate Contract 2.45.32 has a clause about that.

But nobody asks, "will this problem ever happen again?"

So my wife goes to work at MyCorp and she tells me that they need a color change for the links on the website. I find the CSS file and the line and the hex code that they need. Then she tells me the contractor says this will cost $600 (20 years ago, so say $1000 today) and take three to six weeks. I think, "They are thieves!!! If it were one of my clients whose site I regularly access, I would do this in 15 minutes." But first I ask what the process is. The process for ANY contract is:
 - she gets a ballpark estimate of cost (meeting)
 - she must make a business case which is then approved by someone somewhere to solicit bids
 - once approved, they solicit bids (bid + meeting)
 - once the bids are in, someone somewhere decides whether or not this fits within the scope and the proposed budget in the business case.
 - then the contractor and the project manager coordinate with the IT staff to get server access (multiple meetings)
 - then they do the work on the staging platform
 - then they do testing and verify result (meeting)
 - then they pick a go live date with IT (meeting)
 - then it gets pushed to production
 - then it gets tested again (meeting)
 - then the contractor submits an invoice, which is paid Net 60.
 - then they get paid.

When the whole process was laid out, I went from outraged they wouldn't just do this for a regular client as an add-on to being surprised they could do it for ONLY $600. I estimated that if I were to do all that, I would ask $750.

And in addition, there is so much overhead and back and forth, that they can't even hire a small firm that doesn't have dedicated office staff, admins, coordinators and all that.

And half of the overhead is because once, 15 years ago, there was an extra $1000 cost because the contract wasn't detailed enough and the process wasn't explicit enough. The result was that the small firms I knew and worked with, would turn out a website like this for $15k-$20K, but MyCorp consistently paid $200-$300K for every new major website (they had a few dozen brands). But they do a few billion  a year in revenue and just had no clue how much things cost if you were a small, nimble company doing a similar website.

But I digress... I am sure you are shocked. SHOCKED that I could digress so.

The points are

 - all these valves in the pipelines add up in ways that become invisible to the people controlling the valves.

 - I have seen a similar creep in the building requirements in our area. We were ready to pour our fondation for about $5000 22 years ago. Our friend across the street who broke ground two years ago had $30,000 in engineering and soils testing and many months delay and so forth before she should start forming a footing.

Granted, houses might get built on bad soils, they might have foundations crack. All sorts of things happen. But does it actually make sense to require engineering to ensure a solid foundation that will last 200 years if that means you exclude half the market for new homes because the price is so high?

rcjordan

>Yeah, but(s)

Most of my buts involved the building code.  As much as I hate/avoid/circumvent codes, I'll be first to admit the everybody else needs to follow them. hhh