Why Can't We Build an Affordable House?
by Lloyd Alter, Toronto on 10. 6.08
Witold Rybczynski asks in the Wilson Quarterly: "Why Can't We Build an Affordable House?" He notes that "ne of the reasons we are in this mess is that people bought houses they couldn’t really afford" and that when the market returns, people will want smaller houses, closer to the designs of Levittown with their thousand square feet instead of the average of 2,469 SF before the crash.
"Would it be possible to build a modern version of the affordable Levittowner? It would probably be a small house, closer to the 1,000 square feet of Alfred Levitt’s design than the 2,469 square feet that is today’s national average for new houses. Building smaller houses not only reduces construction costs, it is also good for the environment, saving materials and energy—and land. The house would still have three bedrooms, but it would also have at least one and a half bathrooms, since people have come to expect a powder room, even in small houses. Closets would be bigger, and there would be more of them. There would probably not be a living room, but the house would include a family room facing the backyard."
Rybczynski writes that housing will never be as cheap relatively as it was in Levittown because of the costs of servicing land. That is true; all kinds of lot levies and charges are piled on by municipalities to pay for schools and services. But he also writes:
"Smaller houses on smaller lots are the logical solution to the problem of affordability, yet density—and less affluent neighbors—are precisely what most communities fear most. In the name of fighting sprawl, local zoning boards enact regulations that either require larger lots or restrict development, or both. These strategies decrease the supply—hence, increase the cost—of developable land. Since builders pass the cost of lots on to buyers, they justify the higher land prices by building larger and more expensive houses—McMansions. This produces more community resistance, and calls for yet more restrictive regulations. In the process, housing affordability becomes an even more distant chimera. "
Municipalities never demanded big lots to fight sprawl, they did it to get rich taxpayers instead of middle class ones. The builders did it because a kitchen, bath and service connection cost the same whether the house is 1000 square feet or 3,000 SF; the rest is just cheap air. The lenders loved it because they had one loan to do the paperwork on rather than three.
I am also less sure that the single family Levittown style house on a detached lot will or should come back, unless it is built at a density that can support public transit, is sited on land that isn't any good for agriculture, in places with water and renewable power. It is not just the house size, it is the whole suburban model that it represented in 1950 and still does. ::Wilson Quarterly
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It's not the cost of the house, it's the cost of the land, dummy. Houses can be built very inexpensively... but it's the cost of the land that makes building inexpensively prohibitive. To make it work financially you have to build a house that is proportionate to the price of the land, hence you won't find one-room micro-houses in the Hamptons.
There are many ways to build affordable housing (and not just by making them small). The problem of housing costs in the past decade is very much tied to the greed and corruption we are hearing about in the news lately. It was a widespread, self-replicating conspiracy involving builders, agents, appraisers, loan officers and the like. They artificially drove up the market in many areas (because they could) and buyers rushed to scoop up properties because they would certainly cost more next week.
I'm sure that the demand grow for more affordable homes as banks return to more traditional loan principle like 20 percent down payments and debt to incom ratios. However, I would guess that the homes would still need to be bigger than 1,000 sqft for most families with more than one child. I've got 5 kids. We are currently renting (due to the housing bubble) a place that is about 1,000 sq ft and my wife is about to lose her mind.
We can build affordable homes; people just need to be realistic. We built a new 1350 square foot 3 BR 2 BA house with full basement and 2 car garage on 5 acres complete with everything, including a geo-thermal heating system for just under $200,000.
Reasonableness and moderation in everything is required, including building homes. People actually have to think things through and mitigate risk.
Just because a family of 4 have the current means to build a 5000 sf home with elevator and 4 car garage doesn't mean that's the right thing to do.
I am 26 and have been looking at houses for the past couple of years but am still renting for the simple reason that I can not find a house that I like. The main reason all of them are to big. It is just my girlfriend and I why should we waste the extra money it takes to heat and cool areas we do not use? Why should we use valuable time cleaning areas we do not use? And the most important thing why should I help more destruction of forest to build that extra space that I will not use. For now we will continue to rent our studio apartment at 430 sq. feet because it is what we need. That is until we can find a small older house that meets our needs. 2 bedrooms, 1 1/2 bathrooms and close to parks.
Hmm... I find it strange that other countries can raise normal children (better behaved and more literate) and experience domestic bliss in smaller homes. (See Japan, Belgium, France, Germany average sized homes)
With homes that are never paid off, but only stepping stones to the next mortage, I don't wonder that people get stressed out when they spend time with oneanother in America. (Holidays being one of the greater times of suicide in America) The nonconscious focus of life for man in America appears to be the accumulation of material wealth more than what the planet can sustain.
A 100-200 square foot home for a single person has the potential to fit within the planet's capacity. When our arbitrary requirements exceed what the planet is capable of, we are on our eventual way to extinction whether by the deterioration of society or some other mean.
I think this is the case around the country. There are very few affordable housing complexes available for those who aren't making a considerable amount of money. I understand your concerns but unfortunately can not offer any explanations.
I have no idea of the scenario in the US but in Europe, houses tend to be much smaller but cost even more (1200 eur\sqm).
Since the continent is very densely populated and connected by transportation a vast majority of territory is classified as "urban" or "urbanizable" thus leaving few patches of isolated, cheaper land.
Small houses here are as much a consequence of habit and taste as of necessity.
I bought my first house in a nice neighborhood that was a reasonable size for public transportation and you could bike or walk most anywhere. The house was 1400 sq ft with a 2 car garage on a 1/2 acre lot, less than 60K (1995). The total population of the town was about 5000 in SW Oklahoma. My second house in SW Michigan was 1600 sq ft and cost less than the first house. It was a new modular (mobile) home for 50K (1998). We put it in a park to begin with on a lot of about 1/8 acre. We looked two years ago for a house in our price range and found nothing that we liked as much so we moved the house, talk about reuse. It now sits on a basement on an acre, 16K, of property in a small neighbor where I can bike to work and the grocery store.
I don't think that it is the cost of the house or the land but the thinking that there is a way things have always been done and that is why I can't find the thing that makes sense to me.
There are a couple of reasons why houses are so expensive. Here are two important ones:
1.) Women in the workforce : Since a much larger percentage of women are working now, families can afford to spend more on housing. This increases demand and drives up the price of homes.
2) The fed has kept the interest rate incredibly low which has made it easier to borrow money. This increases demand and drives up the price of homes.
Ed is correct, the land cost is the major barrier to affordability. Fortunately in today's economic climate where landowners are having difficulty selling, there are deals to be made.
There are opportunities within the design of a home where costs can be reduced. A restricted floor area coupled with linking properties together in for example a terraced form can make significant savings. Construction costs can also be lowered by offsite, prefabricated building using standardized building elements.
Effective on site management of men and materials really does speed up the building process, reduce error, minimise wastage in time and material. This all has a dramatic effect on the financing of the development by reducing the building period.
There are also a large number of innovative firms offering cheap green solutions to the self builder, from ground source heat pumps to rainwater recycling.
All of this means that there is now a great opportunity for people to build green while larger construction firms are in trouble.