The lack of interesting ideas or solutions on this front is frustrating to me. So I would like to offer mine.
I focus on two specific problems: the gulf in cost between renting and owning, and the lack of inventory supply- too few homes on the market with too many people looking to buy.
One of the things you hear mentioned a lot are “starter homes,” often in reference to low cost small sized fixer-uppers that young folks could traditionally afford. Another way to think of “starter homes” is from a new construction perspective. What’s the most basic home you could build for a small family? Two bedrooms. One bathroom. Optional laundry hookups for a future washer and dryer, otherwise laundromat. Two basin sink. No dishwasher 400-600 square feet. Combination living room/dining room. Four foot crawl space with forced air. Cozy. Solid. Cheap to heat, and power.
No one is building these houses.
The houses being built now are monsters. There’s a whole building industry built on it, much like the wedding industry. Instead of planners, florists, photographers, caterers, venues, and musicians there’s designers, architects, tile setters, electricians, plumbers, and mechanical installers. Each field has a single supplier that is pushing a single product (ideally, but with alternatives of course), and like your basic wedding package people are walked through and handed a new home, custom tailored to them in the most financially maximized way possible.
The houses I seem to build now have a separate bathroom for every single room. Two dishwashers. Two laundry rooms, with sinks. Multiple air handlers. Ice makers. Sub Zero refrigerators. 4 bedrooms. A guest suite. And that’s all fine and good, but where are the “normal” houses? Why aren’t more people in the lower middle class building homes?
It’s a hard thing to do on your own. And unless you get some property out on some dirt road that isn’t walkable to anywhere, you’re probably not even going to make it out of the gate because of zoning laws, and minimum lot size requirements that all cities have. Back in the day people could chop up their properties however they wanted and sell bits of it off. Now everything is kind of stuck in place unless you have the money to lobby for alterations to the (already mostly arbitrary) zoning laws. All the houses in town are stuck with their jacked up prices and property lines- and if a home needs to be replaced, the value of the property mandates a fresh mcmansion with all the bells and whistles. If an accident happens to the property, then insurance pays for it- again, based on that property value.
It leaves cities stuck with big expensive homes everywhere for rich folks, expensive apartments for poor folks. and modular homes/trailers/starter homes for the countryside outside of town- requiring a vehicle, and all the money that goes into that.
Here’s my solution:
Take deceased metro properties- old shopping malls that are abandoned, department stores that are abandoned, office buildings that are abandoned- and rezone them to single family residential. With tax incentives and zoning changes alone, allow developers to purchase these properties, terraform them, use the city’s utilities (gas/water/electical), split them into multiple tiny individually ownable lots, and build a bunch of small, cheap, but sturdy homes- like the starter home I described above. Then put them on the market for market rate. Do it everywhere. Enjoy the following benefits:
1) increase in housing supply, which would drive prices down across the board
2) the low market rate for a new starter home paired with the blanket lowered prices from increased supply would give people a very affordable middle step between renting and their forever home, allowing them to build actual equity for that eventual upgrade.
Loading comments...