These businesses could easily be classified as oligopolies, where a few powerful groups control the market. It is estimated that the absence of competition costs the US around 150,000 additional homes each year. They have been able to time their work so that they produce less while increasing prices. Economists determined that from 2013 to 2017, housing prices grew over twice as fast as they would have if the market was not consolidated.
One economist notes that big firms have the capital and credit to hoard land for years and work to time the market so that they can make the largest profit. Strategies like these restrict the supply of new housing.
While the consolidation of the building industry may be one contributor to the US housing crisis, land availability, cost of labor, regulations, and materials also contribute to the high cost of housing and should be considered as the issue is addressed.
I agree with you that the housing crisis is out of control, especially here in California. Much like we saw in the San Francisco documentary a few weeks ago, many people are being pushed out of places they have lived in for many years, due to contractors and developers buying land and industrializing it. One reason that the housing crisis is so bad in California is that this is such a desirable area for people to live. We have good weather, schools, and job opportunities. This then creates high demand of a product with a comparatively low supply.
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