Make Homes Affordable Again

[bèlla]

Make Homes Affordable Again

One reason Americans are so disenchanted with capitalism is that the national dream of home ownership is no longer within reach for much of the population. As a rule, housing becomes unaffordable when it takes up more than 30 per cent of a buyer’s income. Prices have been unaffordable in big cities for decades and have spiraled out of reach for a median US home in recent years.

Astonishingly, the US is building no more new homes and 80 per cent fewer “entry level” homes than it was half a century ago — when the population was much smaller. And the time it takes to complete a new multi-unit dwelling has doubled, with most of that increase coming in the past two decades — as “NIMBY” resistance spread.

Since 2000, according to Zillow, the average household income has doubled but the average price for its listings has tripled to $360,000. Over that period, the time it takes to save for a 20 per cent down payment has risen by nearly half to eleven years. And the share of income that goes to mortgage and insurance payments has risen by more than a third to 35 per cent — into the unaffordable zone.

Because developers are building homes much more slowly than Americans are forming new households, the shortage is growing by several hundred thousand residences a year. While consumer price inflation has receded to below 3 per cent, home prices are still rising by more than 5 per cent a year. True, voters continue to express anxiety about the cost of basic staples, but food and clothing account for a smaller share of household expenses than in the 1970s. Housing takes up a greater and growing share, and could become a pivotal election issue.

 

[Bradskii]

Anything from the GOP on how they might tackle this problem?

 

[bèlla]

Anything from the GOP on how they might tackle this problem?

Nothing officially. But I saw something about 40 year mortgages being suggested a couple of months ago. Zillow is assisting with down payments through a special program. But in respect to housing, Cardone is a better resource and what he said is what I'm hearing elsewhere.

~bella

 

[bèlla]

Anything from the GOP on how they might tackle this problem?

See what RFK Jr. said on the subject. The third voice is usually the truth. If you reference Yang's comments on job replacement you'll find everything he said happened or is underway. And if memory serves he championed UBI too.

~bella

 

[iluvatar5150]

Anything from the GOP on how they might tackle this problem?

On a couple of occasions, Trump has espoused anti-YIMBY measures that would supposedly protect the character of suburbs. I can’t fathom why his fanbase isn’t hammering him on that more.

 

[RDKirk]

Back in the 50s and 60s, the US government massively subsidized the building of starter homes, creating "suburbs" virtually overnight. It was disguised as a benefit for military veterans, but let's remember that at the time military veterans made up a massive portion of the working generation of home-buying age.

That benefit for veterans still exists, but veterans make up a much, much smaller portion of the working generation of home-buying age.

IOW, the government is subsidizing home ownership today at a much lower real level than it did 50-60 years ago.

 

[RileyG]

Anything from the GOP on how they might tackle this problem?

I don't think so.

 

[Nithavela]

Anything from the GOP on how they might tackle this problem?

Vote for Trump. He has a plan.

 

[Pommer]

Vote for Trump. He has a plan.

Or will have…in two weeks.

 

[Bradskii]

Vote for Trump. He has a plan.

I would imagine that wherever the 11 million immigrants are living right now, those houses will become available when he deports them all. Two birds with one stone.

Utter genius.

 

[Pommer]

I would imagine that wherever the 11 million immigrants are living right now, those houses will become available when he deports them all. Two birds with one stone.

Utter genius.

But what will the Nation do with all of the houses that it seized from those that owned their own homes?
We don’t want the government in the real-estate market, no! We’d have to sell it! Do we know any good, loyal, real-estate developers who might “help”?

 

[NxNW]

Anything from the GOP on how they might tackle this problem?

They want to make it harder to vote.

 

[DaisyDay]

Vote for Trump. He has a plan.

Darn, if that weren't the claim the first time around.

 

[Richard T]

It is the government that is a large part of the problem, He is from the national assoc of home builders.
"On a dollar basis, applied to the current average price ($394,300) of a new home, regulation accounts for $93,870 of the final house price. Of this, $41,330 is attributable to regulation during development, $52,540 due to regulation during construction. In dollar terms, the NAHB studies show the cost of regulation continuing to rise between 2016 and 2021, although not as much as it did between 2011 and 2016?

https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-government-regulation-in-the-price-of-a-new-home-may-2021.pdf?rev=29975254e5d5423791d6b3558881227b

On top of these regulations land costs more because of zoning restrictions and "smart growth" plans to restrict new development. Try finding a mobile home lot in most areas. Impossible except maybe on rented land. As to the quality, if you remove many regulations? It depends, but I know at least one county where you can opt out. I built a new addition in one state, and had a total of 20 dollars in permit fees. I hand drew on a single piece of paper the size and that was it for planning. The inspector came out twice to check foundation depth and framing. I exceeded the regs and the build was super cheap. Meanwhile in Florida we joked with a neighbor where it cost him 800 in permits to build a 1000 dollar shed. Yes, many red states have some of the most costly restrictions. I am sure Florida is not the worst.

Got to love those new home impact fees too. 15k for schools, 5k for parks, 5k for police, of course varies by state and county. I owned a lot that was allegedly worth 40k, taxes were about 600 a year. Still had to pay water district fees including special 4K assessments to lower phosphates from 96 to 99 percent of all waste water. (my town of 70K paid 35 million for a plant upgrade) yet my land never called police, used a park or educated a kid or had fire. So how was my land not paying its fair share already? I finally want to use it and have those costs up front plus connection fees and all the regulation stuff.

Local governments are often fiefdoms. They are run by those with an agenda to gentrify and increase property values through supply restrictions. I laugh too because they talk out both sides of their mouth. They want to restrict building but at the same time they will pay businesses to relocate there if they bring in so many jobs. Demand up and Supply down. lol, Then many retire and just move to another location where prices are low. So you know there are some towns with declining population with decent homes for as little as 60k.

I know a great Christian teacher in the Philippines. She is building a house and the total build was about 400 square feet and cost just under 10K. Yes, small 1 bedroom concrete block home, but quite livable. I asked her about the septic tank. She had that installed for about 600 dollars (Translated from pesos for you). USA septics would run at least 3k, average is 7-8K.
So to sum it up, there is not really many willing in government to address this problem. They are making it worse. Lots of skilled trades workers too that would accept work permits if they could get visas. I admit though that many areas have lots of undocumented workers building homes which probably is a good thing if it were not illegal.

The other part of government that made housing expensive is the Federal Reserve. mortgage rates at 3% so long that those people won't move into a different home with rates at 6%. Sure rates are coming down again, but savers loaning at 3% when inflation hits 8% plus is going to leave many thinking twice should they try that again. Meanwhile the Fed is helping the Treasury after they print money and buying trillions in govt bonds and mortgage backed securities. Recent balance sheet trends
8 trillion (Chart reads 8 million but in millions, so 8 trillion) Shameful because money printing drives inflation but big spending helps you get elected because voters rarely reward anyone disciplined with the govt handouts.

I have ranted on this before. Keep electing people that are out of touch and this will not just continue but get worse. 25,000 credit for first time homebuyers? That will just drive up home prices in many areas.

 

[RDKirk]

It is the government that is a large part of the problem, He is from the national assoc of home builders.
"On a dollar basis, applied to the current average price ($394,300) of a new home, regulation accounts for $93,870 of the final house price. Of this, $41,330 is attributable to regulation during development, $52,540 due to regulation during construction. In dollar terms, the NAHB studies show the cost of regulation continuing to rise between 2016 and 2021, although not as much as it did between 2011 and 2016?

https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics-plus/special-studies/2021/special-study-government-regulation-in-the-price-of-a-new-home-may-2021.pdf?rev=29975254e5d5423791d6b3558881227b

On top of these regulations land costs more because of zoning restrictions and "smart growth" plans to restrict new development. Try finding a mobile home lot in most areas. Impossible except maybe on rented land. As to the quality, if you remove many regulations? It depends, but I know at least one county where you can opt out. I built a new addition in one state, and had a total of 20 dollars in permit fees. I hand drew on a single piece of paper the size and that was it for planning. The inspector came out twice to check foundation depth and framing. I exceeded the regs and the build was super cheap. Meanwhile in Florida we joked with a neighbor where it cost him 800 in permits to build a 1000 dollar shed. Yes, many red states have some of the most costly restrictions. I am sure Florida is not the worst.

Got to love those new home impact fees too. 15k for schools, 5k for parks, 5k for police, of course varies by state and county. I owned a lot that was allegedly worth 40k, taxes were about 600 a year. Still had to pay water district fees including special 4K assessments to lower phosphates from 96 to 99 percent of all waste water. (my town of 70K paid 35 million for a plant upgrade) yet my land never called police, used a park or educated a kid or had fire. So how was my land not paying its fair share already? I finally want to use it and have those costs up front plus connection fees and all the regulation stuff.

Local governments are often fiefdoms. They are run by those with an agenda to gentrify and increase property values through supply restrictions. I laugh too because they talk out both sides of their mouth. They want to restrict building but at the same time they will pay businesses to relocate there if they bring in so many jobs. Demand up and Supply down. lol, Then many retire and just move to another location where prices are low. So you know there are some towns with declining population with decent homes for as little as 60k.

I know a great Christian teacher in the Philippines. She is building a house and the total build was about 400 square feet and cost just under 10K. Yes, small 1 bedroom concrete block home, but quite livable. I asked her about the septic tank. She had that installed for about 600 dollars (Translated from pesos for you). USA septics would run at least 3k, average is 7-8K.
So to sum it up, there is not really many willing in government to address this problem. They are making it worse. Lots of skilled trades workers too that would accept work permits if they could get visas. I admit though that many areas have lots of undocumented workers building homes which probably is a good thing if it were not illegal.

The other part of government that made housing expensive is the Federal Reserve. mortgage rates at 3% so long that those people won't move into a different home with rates at 6%. Sure rates are coming down again, but savers loaning at 3% when inflation hits 8% plus is going to leave many thinking twice should they try that again. Meanwhile the Fed is helping the Treasury after they print money and buying trillions in govt bonds and mortgage backed securities. Recent balance sheet trends
8 trillion (Chart reads 8 million but in millions, so 8 trillion) Shameful because money printing drives inflation but big spending helps you get elected because voters rarely reward anyone disciplined with the govt handouts.

I have ranted on this before. Keep electing people that are out of touch and this will not just continue but get worse. 25,000 credit for first time homebuyers? That will just drive up home prices in many areas.

What does he mean, though, by "regulations?" Is he talking about paperwork, or is he talking about regulations such as homebuilding quality standards and codes?

 

[Richard T]

What does he mean, though, by "regulations?" Is he talking about paperwork, or is he talking about regulations such as homebuilding quality standards and codes?

It's a good question. There is a table in that link. Looks like codes that have changed in the last ten years are about 10% of building costs. The breakdown is interesting. Delays, OSHA requirements, various fees, zoning changes etc. Of course every jurisdiction is different and to me the average total cost of the home is much less in most of the areas I ever lived. I think that most contractors do not skimp much. Sometimes it is a judgment call. Once I put on a metal roof using the larger screws and exceeded the minimum for each panel. When the inspector checked the roof the pitch was too low for code because I was supposed to put sealant between each panel. Something I had never heard of or read before. Luckily he let it go. My roof was way better than a shingles roof. Sure if I did a metal roof again in any jurisdiction I would check.

 

[RDKirk]

It's a good question. There is a table in that link. Looks like codes that have changed in the last ten years are about 10% of building costs. The breakdown is interesting. Delays, OSHA requirements, various fees, zoning changes etc. Of course every jurisdiction is different and to me the average total cost of the home is much less in most of the areas I ever lived. I think that most contractors do not skimp much. Sometimes it is a judgment call. Once I put on a metal roof using the larger screws and exceeded the minimum for each panel. When the inspector checked the roof the pitch was too low for code because I was supposed to put sealant between each panel. Something I had never heard of or read before. Luckily he let it go. My roof was way better than a shingles roof. Sure if I did a metal roof again in any jurisdiction I would check.

I do a lot of significant DIY on the homes I've lived in, so I spend a lot of time studying building codes as well as watching lots of home inspection videos and such. Down here in "business-friendly" Texas, for sure, home buyers and home owners have to be on guard because "business-friendly" Texas will let contractors get away with a lot. This is very much a caveat emptor state. So, I've seen some very shoddy work and business practices. I have a friend who bought a new house and somehow the finish carpenters managed to punch numerous holes through pipes embedded in the walls (a fault of the plumbers not putting nail shields over the studs where they passed pipes through them). Brand new house, and she's finding leaks in the walls when they damage the floors underneath. Yes, she has a home warranty, but...really.

That's not "codes being 10% of building costs," that's "our building costs would be 10% less if we didn't have to do our job so well."

We are right now investigating having some major work done on our crawlspace foundation. The work has to be done in three increments because you can't just jack up an old house five or six inches in one step. Part of the cost is going to be a $300 city inspection after each increment. The inspector will check for any plumbing or structural issues caused by that increment of jacking the structure. Of course, as the contractor gave his estimate, he characterized that inspection expense as "not our fault, that's the city."

As I said before, I have good reason not to trust the contractor (or his workers) to have necessarily done the job right. So, while I have a gripe about having to pay for those city inspections, I cannot deny that they're necessary. If I were a younger man, I'd get down in the crawlspace and do the inspection myself (even after the city inspector). But I'm an old guy who shouldn't be crawling around down there, and of course, most homeowners wouldn't or couldn't do it anyway.

 

[Richard T]

I do a lot of significant DIY on the homes I've lived in, so I spend a lot of time studying building codes as well as watching lots of home inspection videos and such. Down here in "business-friendly" Texas, for sure, home buyers and home owners have to be on guard because "business-friendly" Texas will let contractors get away with a lot. This is very much a caveat emptor state. So, I've seen some very shoddy work and business practices. I have a friend who bought a new house and somehow the finish carpenters managed to punch numerous holes through pipes embedded in the walls (a fault of the plumbers not putting nail shields over the studs where they passed pipes through them). Brand new house, and she's finding leaks in the walls when they damage the floors underneath. Yes, she has a home warranty, but...really.

That's not "codes being 10% of building costs," that's "our building costs would be 10% less if we didn't have to do our job so well."

We are right now investigating having some major work done on our crawlspace foundation. The work has to be done in three increments because you can't just jack up an old house five or six inches in one step. Part of the cost is going to be a $300 city inspection after each increment. The inspector will check for any plumbing or structural issues caused by that increment of jacking the structure. Of course, as the contractor gave his estimate, he characterized that inspection expense as "not our fault, that's the city."

As I said before, I have good reason not to trust the contractor (or his workers) to have necessarily done the job right. So, while I have a gripe about having to pay for those city inspections, I cannot deny that they're necessary. If I were a younger man, I'd get down in the crawlspace and do the inspection myself (even after the city inspector). But I'm an old guy who shouldn't be crawling around down there, and of course, most homeowners wouldn't or couldn't do it anyway.

I think your answer lies here. Half the workers in Texas in construction are are undocumented. The quality of work will suffer. I can say I once attended a city meeting where they passed a new ordinance that only a city worker can shut of the water supply to the house, at a charge of like 25 dollars. It was a revenue enhancer. I could see the smirk on the councilman pushing it through. No real serious need for the change. No report of broken valves or anything to suggest that. The point is proper regulation. On jacking a house, why not just check when it is done? Either way you would find defects if they are there. Seems overkill to me. IF the inspection is done in less than an hour it is for sure a revenue enhancement because inspectors do not make more than 50 an hour. Report: Half of Texas construction workers undocumented

 

[RDKirk]

I think your answer lies here. Half the workers in Texas in construction are are undocumented. The quality of work will suffer. I can say I once attended a city meeting where they passed a new ordinance that only a city worker can shut of the water supply to the house, at a charge of like 25 dollars. It was a revenue enhancer. I could see the smirk on the councilman pushing it through. No real serious need for the change. No report of broken valves or anything to suggest that. The point is proper regulation. On jacking a house, why not just check when it is done? Either way you would find defects if they are there. Seems overkill to me. IF the inspection is done in less than an hour it is for sure a revenue enhancement because inspectors do not make more than 50 an hour. Report: Half of Texas construction workers undocumented

I forgot to mention the reason that the company has to wait for some time between increments so that the house can adjust. The wooden beams, floors, walls, windows, doors, and such have only so much flexibility and need time to "accept" the new alignment before the next increment. If you did it all at once, things would just break...it has to be gradual adjustment. The reason to check for plumbing and structural problems after each increment of raising the house is because each increment can cause those problems, particularly in an old house with old plumbing, electrical, et cetera. It might be weeks between the first increment and the final increment. I had zero problem with the fact that those services would need to be inspected after each increment. My point is that such logical and rational requirements should not be considered unnecessary overhead that was imposed arbitrarily.

Regarding that ordinance requiring a city worker to shut off the water, it likely depends on whether shutting off the water must be done via the city's meter. I know that was the case in Garland, because the meter is remotely monitored and shutting it off required coordination within the monitoring system. At my house in Plano, there is the city's meter at the curb that we're not supposed to touch (although I did whenever I needed to and never got a warning), but when we replumbed we had our own main shut-off valve installed inward of the city meter...I can play with that as much as I want.

 

[Richard T]

I forgot to mention the reason that the company has to wait for some time between increments so that the house can adjust. The wooden beams, floors, walls, windows, doors, and such have only so much flexibility and need time to "accept" the new alignment before the next increment. If you did it all at once, things would just break...it has to be gradual adjustment. The reason to check for plumbing and structural problems after each increment of raising the house is because each increment can cause those problems, particularly in an old house with old plumbing, electrical, et cetera. It might be weeks between the first increment and the final increment. I had zero problem with the fact that those services would need to be inspected after each increment. My point is that such logical and rational requirements should not be considered unnecessary overhead that was imposed arbitrarily.

Regarding that ordinance requiring a city worker to shut off the water, it likely depends on whether shutting off the water must be done via the city's meter. I know that was the case in Garland, because the meter is remotely monitored and shutting it off required coordination within the monitoring system. At my house in Plano, there is the city's meter at the curb that we're not supposed to touch (although I did whenever I needed to and never got a warning), but when we replumbed we had our own main shut-off valve installed inward of the city meter...I can play with that as much as I want.

Ok, I get you better on the great reason to wait, but the ones lifting the house would still know the final has to pass so i would think they are not going to just be careless but maybe i am naive on that. Yes, the meter was a simple turn valve near the curb. In roofing, cities for example specify the screws (metal) or the nail pattern. 5 in some parts of Florida. The inspector just looks at it when its done. I cant imagine anyone failing it because an aspahlt roof would seal already if it is hot. They will first inspect the tar paper/water barrier if its a tearoff or new. If Texas has no impact fees though that makes a huge difference. Lots more hvac regs I think all over. God's best to you.