Some of the better returns, in my limited experience, are reaped by land and under-improved property speculators/developers (development, I this case, referring to lot subdivision or other methods of locking in construction approvals above and beyond existing by-right approvals).
Another large proportion of potential profits are destroyed by the regulatory process because by-right approvals are often extremely limited and easily challenged by third parties. I'm a huge fan of communities being able to shape their built environment, but making most development approvals into a lengthy, expensive series of challenge/response hurdles rarely leads to progressive outcomes.
Lastly, project delivery timelines can de-sync with economic cycles due to long developent periods and the timeline of construction itself. Since construction starts typically lag economic booms, people take losses due to this off-cycle behavior more often than they realize unusual gains.
I work in a small construction market though, so my experiences may not carry well to the more populous parts of the USA.
Another large proportion of potential profits are destroyed by the regulatory process because by-right approvals are often extremely limited and easily challenged by third parties. I'm a huge fan of communities being able to shape their built environment, but making most development approvals into a lengthy, expensive series of challenge/response hurdles rarely leads to progressive outcomes.
Lastly, project delivery timelines can de-sync with economic cycles due to long developent periods and the timeline of construction itself. Since construction starts typically lag economic booms, people take losses due to this off-cycle behavior more often than they realize unusual gains.
I work in a small construction market though, so my experiences may not carry well to the more populous parts of the USA.