Construction prices nationwide have risen about 5 percent a year for the past three years, according to the Turner Building Cost Index. Costs have gone up even faster in big cities and across California, according to RSMeans, a unit of Gordian, which compiles construction data. In the Bay Area, builders say construction prices are up 30 percent over the past three years — so much that even luxury projects are being stalled by rising costs.

“It’s reached the point where you cannot get enough rent or you cannot sell enough units to make it a viable deal,” said Lou Vasquez, a founding partner and managing director of Build, a real estate developer in San Francisco.

The surge in construction prices is coming at the worst possible time for booming cities like New York, Seattle and San Francisco, already dealing with an affordable-housing crunch that has increased the homeless populations and stoked acrimonious debates about growth and gentrification. City and state legislators have tried to tackle their housing problems with proposals to increase subsidized affordable housing, reduce building regulations and make it legal to build taller.

But even if every overpriced city suddenly overcame the thicket of zoning rules and neighborhood opposition that make it difficult to build new housing in the first place — which seems doubtful — today’s diminished building industry would lack the capacity to build at the needed pace. This affects the rich as well as the poor, because it raises the cost of high-end condos and affordable housing alike.

Later this year, California residents will vote on a proposed $4 billion bond to build more subsidized affordable housing. In San Francisco, where developers say the per-unit construction cost is edging toward $800,000, that would buy about 5,000 units, a relative blip. “Costs have risen so much that it is not possible to build homes where people want to live at the prices and rents they can afford,” said John Burns, founder of John Burns Real Estate Consulting.

....