The arithmetic of a fixed cost per lotConsider what a builder faces on one parcel. It represents a larger share of a small home’s price than a large one’s, which again tilts the builder toward the large one. A builder borrowing against a project with a thin margin faces worse terms than one with a wide margin, and thin margins are exactly what small homes produce. Capital availability for small-scale infill builders, historically the people who built starter homes, contracted after the 2008 downturn and did not fully return. The compounding effect is that each cycle ends with proportionally fewer small homes than it started with, and the existing small homes get bid up by buyers who have nowhere else to go.