New Home 3.0 is a fascinating microstudy in changing a city's nature, building, and the future of home developments.
Located in a greater metropolitan area but somewhat separated from it, it had the good fortune to start out as its own city (instead of an incorporated suburb) and so has an identity all its own. One can find a small original downtown (which is well preserved and cared for), the inevitable next wave of growth of strip malls and big box stores, and the final expansion along the state highway which connects us to the larger urban area and is itself another zone for big box stores and major chains.
And yet, we are within 10 minutes of wide tracts of actively used agricultural land and small old agricultural towns that have not fully "made the transition" to a thriving city and so live with lesser well preserved downtowns and suburbs surrounding the historic town.
Add to this, then, the phenomena of large acreages being sold and housing developments being put in place.
To those that may not have seen them lately, housing developments are becoming less and less attractive. Even 20 years ago, within a development there was some element of difference between the homes; one had 3-5 models to choose from and these were alternated on the lots. Those days have passed: the new housing developments are packed in (the so called "Zero-lot line", where there is minimal or no room between one's self and one's neighbor), minimal yards front and back, and the houses all appear precisely the same with only a difference in home colour to show a difference. There are no trees in the back as you drive by, only yards and yards of fences with backs of houses staring at you as you drive by.
The building continues apace. And yet, I wonder how long and what worth these will have.
While the economy may be booming in some areas, it is arguably not booming in New Home 3.0. Some of the major employers have announced significant layoffs and given the state of what they make and the world, I scarcely think these are the last layoffs they will have. These are precisely the jobs that are required to purchase a home here where $500,000 is the current low level for a home for sale - e.g., the market seems primed to be dropping off and in a big way.
The other thing that makes me wonder is the long term value. Having at one time owned a house that was done by a commercial builder, I know quite well the quality of their construction, which can be "iffy' at best. After all, when is building houses like an assembly line, "quality" may not be the biggest concern. Speed in finishing them is.
Certainly it is not a problem now. But 20 years from now? There are going to be hundreds of homes that will have the same range of issues. Add to that a market which is seems to be changing, and I see the potential for whole areas of aging homes in states of disrepair and a limited buyers market as the "good" jobs disappear.
Is there a solution? It is easy enough to say "Build less homes" (and I, as someone who sees the value in land not built on would completely agree with), but that does negate the right of the individual to do what they will with what they own. Could cities also target their building towards already "built out" parts of town that need renewal? Yes, but then one runs the complaints of "gentrification". And all of this assumes an ever increasing populations with an income to afford them.
Likely this problem will not manifest directly for us; with some level of planning we will have a house in the not too distant future which will more or less be the one we keep until circumstances intervene. But it does make me wonder, as I drive by clone after clone behind newly raised fencing, what it will look like in 20 years.
The capital city of the state I live in passed ordinances at the end of 2018 to permit duplexes and triplexes on any residential lot in the city, tear down a single home and replace it with a duplex or triplex. Local minority owned newspaper called this a "bold move to end the racist policy of single family housing". That's one way to increase population density TB. Within a mile of my residence there's been a 60 unit co-op put up, a 65 unit rental building with a 56 unit rental right next to it and a 150 rental unit on a main road, all opening later this summer. The Times.....they are a-changing.....
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DeleteWe had a similar situation in New Home 2.0: a push for du/tri/quadplexes close in and huge apartments as far as the eye can see. What this seems to lead to is a huge renting class with no investment in making their neighborhood better and little if any community.
DeleteWe will end up with more people placed into more space with less community. That does not sound like a recipe for success.
"Building starts" has long been a term brought up as an indicator of the economy. That and "growth." I don't pretend to understand the philosophy behind it all, except to say that it seems they never consider the well-being of commoners in their assessments; rather, they seem to judge the economy based on the well-being of investors and their investments.
ReplyDeleteLeigh - I think the philosophy stems from the idea that a house is an employment driver. Housing is still largely a manual based trade so you have every specialty that goes into building it. Then there is all the fitting out of the house with furniture, appliances, etc. And services for the house -plumbing, electricians, cleaning, yard work, etc. In theory they are quite an economic driver - plus, of course, those property taxes that the county is very ready to spend.
DeleteIt would be hard to deny the fact that a home is beyond the reach of a great many people at this point; with starting ranges as noted above for $500,000 in our local area (and a "fixer-upper" at $400,000), this outstrips a lot of incomes. I do not know if 20% down payments are still in vogue; if they are, that is $100,000 saved up and the ability to make monthly payments of around $2600 at 7% interest, the going rate. That is a lot for anyone.
In theory the Consumer Price Index was supposed to give a more "balanced" view of how people are doing, but they often exclude food and fuel in their reporting as those are volatile expenses - oddly enough, the two things almost everyone has to by. This is why in my experience the Consumer Price Index seems light years away from my actual lived experience.
My opinion: When a house is an investment or a statement, it isn't a home. A place to be out of the weather and live in, to use... Now that can be a home. I see them more as a tool to help me live more than anything else. My last house was 35k in 2012. This one came with the property, not even valued by the tax office. Like Dona Reed said in The Bailey Savings and Loan, " How much do you need?"
ReplyDeleteTrue enough, but when "the law" is rewritten to allow a welfare slum apartment complex to be erected on the lot next to yours, it affects your quality of life. ...So you go to move, only to find that the welfare slum cratered the value of YOUR house. You sell at a loss. Your next house is that much harder to afford. Meanwhile, an "investor" tears down the house you moved out of and builds yet ANOTHER welfare slum apartment complex. Lather, rinse, repeat...
DeleteWhere I live, new "houses" costing more than $500K are nothing more than Styrofoam-covered frames with stucco smeared over them. The plumbing is plastic. The lots are so small that they can't even accommodate a driveway! This, in an age and place where almost everyone over sixteen years old has a car! People are buying into glorified beer coolers with NO PARKING either on or off street! And there's alternate-side-of-the-street parking for street sweeping, with fines for violators, to add to the fun!
ReplyDeleteThere was a "housing boom" in the 1980's here. Farmers sold off their fields and thousands of houses went up as fast as the cement slabs could dry... Sometimes even BEFORE they could dry. Those places are FALLING APART now. Honestly, I think the "sweet spot" for house construction was in the late 70's into the very early 80's. The country had endured two fuel embargos, so energy efficiency was high on the list for construction. The framing was strong. The plumbing was still copper. The drainlines were plastic, as opposed to cast iron or terracotta. The wiring was up to speed. 2-car garages had become the norm. The properties were more in proportion to the sizes of the houses. There was enough room between the houses to allow for things like RV parking.
This isn't what "The Powers That Be" want now. They want max tax per acre. That means multi-family and apartments. And the farms? No problem. We don't need farms anymore. Everyone knows that meat comes from the supermarket (sarc).
Oh; and when the "good jobs" go away, all those foreclosed houses become Welfare rentals... That's what's happened here in the once-great state of California...
My profession I was in for 35 years. Behind the scenes the big boys have a different mindset than we do. What we are seeing is the culmination of LBJ's bill in 1964. Then congress pasted the bill that we had to loosen credit standers for poor people. The flood gates opened and we all had to comply with people of any color, race or creed. Sometimes even non-citizens. Then came credit score of 550 and we were told to make it work. I was having dinner with a Big Banker and in 2006 I said the crash is coming. These people can't keep up these payments. He said then he has the houses. Then 2008 which gave rise to Blackrock and their unrestricted growth of buying up these repo's. So they pushed the bills in congress to allow this. And now you have beehives next door. Haven't lived in a city in a long time. Look to their politicians and vote them out if they vote yes to something that's going to harm you. But people don't pay attention and vote like they did last time. And then comes the consequences.
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