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We would love to build more affordable starter homes, but when high-end homes cost the same to build and are far more profitable, we lose the incentive to build

We would love to build more affordable starter homes, but when high-end homes cost the same to build and are far more profitable, we lose the incentive to build smaller units This is a major reason why prices are so out of control. Land prices aside, there is no reason somebody couldn't build a nice ~1000sqf house for under $100k. But without literally doing the work yourself, these places just don't get built.

thriftwy 9y ago
Can't you contract the building part if you have a suitable piece of land?
- tehlike 9y ago
  Or you can build larger homes and make profit.
  - thriftwy 9y ago
    What if you are building your own home?
    - tehlike 9y ago
      most people don't have the time/energy or money. Money can be resolved with bank loans, but they have higher interest rates (usually prime + 1.25)
      - thriftwy 9y ago
        If you expect to save $200k on it, it would make sense to quit your job and dedicate a year fully towards construction.
- pxeboot 9y ago
  Sure, but that's going to cost a lot more, as it is now a "custom home". Economies of scale apply strongly to houses.
  - thriftwy 9y ago
    How much more? Is it $300,000 versus $200,000? But now you still get an affordable house that you wanted. I don't think economies of scale rule in house building. I can see how you would out-compete mass production because you a) care, b) pay attention.
  - Empact 9y ago
    Not necessarily the case - my sister just had a home built on land in Dallas and the cost was not much more than new home cost ($129/living sq ft), before that my father built the home we grew up in nearby himself. There's a reason Dallas, Houston, and Austin are at the top of the new home construction numbers - low regulatory overhead make every scale of home building manageable, including self-starting new home construction. Meanwhile the benchmark for new construction starts in SF is 3-5 years just to navigate the intial regulatory approval for construction. Try navigating that as an individual just trying to get a home built for yourself. It's basically impossible.
  - matwood 9y ago
    Not necessarily. There are a range of builders between fully custom and track. There are at least 5 builders in my area that have a sets of plans that you can tweak and then get built.
syedkarim 9y ago
As a data point, a couple of months ago we bought a 1500 square foot home for $114,000. It's a modular home, but still classified as stick built/custom by the zoning authority. https://www.rochesterhomesinc.com/tiptown https://www.rochesterhomesinc.com/tiptown The site work, however, is almost another $200,000.

thriftwy 9y ago

Can't you contract the building part if you have a suitable piece of land?

tehlike 9y ago
Or you can build larger homes and make profit.
- thriftwy 9y ago
  What if you are building your own home?
  - tehlike 9y ago
    most people don't have the time/energy or money. Money can be resolved with bank loans, but they have higher interest rates (usually prime + 1.25)
    - thriftwy 9y ago
      If you expect to save $200k on it, it would make sense to quit your job and dedicate a year fully towards construction.
pxeboot 9y ago
Sure, but that's going to cost a lot more, as it is now a "custom home". Economies of scale apply strongly to houses.
- thriftwy 9y ago
  How much more? Is it $300,000 versus $200,000? But now you still get an affordable house that you wanted. I don't think economies of scale rule in house building. I can see how you would out-compete mass production because you a) care, b) pay attention.
- Empact 9y ago
  Not necessarily the case - my sister just had a home built on land in Dallas and the cost was not much more than new home cost ($129/living sq ft), before that my father built the home we grew up in nearby himself. There's a reason Dallas, Houston, and Austin are at the top of the new home construction numbers - low regulatory overhead make every scale of home building manageable, including self-starting new home construction. Meanwhile the benchmark for new construction starts in SF is 3-5 years just to navigate the intial regulatory approval for construction. Try navigating that as an individual just trying to get a home built for yourself. It's basically impossible.
- matwood 9y ago
  Not necessarily. There are a range of builders between fully custom and track. There are at least 5 builders in my area that have a sets of plans that you can tweak and then get built.

syedkarim 9y ago

As a data point, a couple of months ago we bought a 1500 square foot home for $114,000. It's a modular home, but still classified as stick built/custom by the zoning authority. https://www.rochesterhomesinc.com/tiptown https://www.rochesterhomesinc.com/tiptown The site work, however, is almost another $200,000.