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"More square feet for less dollars" This was the slogan of a house builder I once analysed for a management consulting project on the future of the Australian

"More square feet for less dollars" This was the slogan of a house builder I once analysed for a management consulting project on the future of the Australian building industry. After a week touring display homes, and estimating cost (or costs avoided), I figured out exactly how the market leaders lowered the sticker price while increasing their margins. No matter that the houses quickly fell apart after purchase... The tricks I remember included: * No plaster on the wall behind the fridge * Big mirrors in bathrooms, because mirrors cost about the same as tiles but are much quicker to install. * Eliminate walls on the ground floor, to give the open-plan look. Except that there's no sound insulation, or heat retention. And the new owners need to buy a lot more furniture, otherwise it looks too empty. * Make the eaves very narrow, to reduce the size of the roof. Even though the walls now have no shade from the sun, the interior heats up more in summer, and you spend much more on air conditioning. * Build the house like a big box, up close to the boundary line... Looks good on the plan. Less good when your neighbours' bedroom windows look right into yours. And less good when there's no shade or privacy because the builder cut down the established trees... I remember both feeling in awe at the cost-cutting ingenuity and disgusted at future problems it would bring the unlucky new owners.

brendoelfrendo 6y ago
I've seen just about all of the above, and a few more: * Cheap out on just about anything that you need a lot of (knobs, drawer pulls, light switches) * Cut tile or flooring at unusual angles to avoid having to do more complex cuts * Use the cheapest lighting and plumbing fixtures possible I've actually had friends buying new construction homes tell me that they've told the builder NOT to install certain things because they didn't want to be saddled with whatever "builder grade" materials the contractor was going to use. Imagine that! Spending hundreds of thousands of dollars for a new house, but you already don't trust the builder not to cut corners! Where's the craftsmanship?
- StillBored 6y ago
  MDF: Particularly in most cabinetry. That stuff should be illegal because the cheap plumbing fixtures will invariably leak, and when that happens now your cabinet is ruined too. I think similarly for OSB, and don't believe a word about how its a good building material, but thankfully i've only seen it crumble once so far. Mostly I suspect because its not been in to many buildings for 30+ years of heat and moisture cycling.
  - Lammy 6y ago
    OSB's given me way too many splinters to want to work with it even if it's a fine material :p
- lotsofpulp 6y ago
  > Imagine that! Spending hundreds of thousands of dollars for a new house, but you already don't trust the builder not to cut corners! Where's the craftsmanship? The craftsmanship is there, but 95% of people can’t afford it. It starts all the way from the fact that suppose you and your competitor are looking to purchase a parcel of land to develop a community. You make a nice plan that retains nice old growth trees, gives adequate space for eaves, design better than minimum standards drainage, insulation materials, etc. Your competitor draws up plans and cuts all of those niceties out, and saves a few million dollars on costs. Now the competitor can offer to pay a few million more for the same parcel of land. Guess who gets to develop it?
  - brendoelfrendo 6y ago
    I think this is true, but only part of the equation. I think you certainly could build a house at average-suburban-prices without cutting corners, but your profit margins would be lower or you'd have to compromise somewhere else. For example, the market has optimized around square footage, $/sqft is the most important metric for many consumers, ergo a smaller but better built house won't sell (or, at least, won't sell for a price that justifies the extra expense). Nobody ever got rich by leaving money on the table. The disadvantage of living in a seller's market is that it's also a builder's market; when homes sell as fast as they're being built regardless of quality, there's little pressure on builders to improve quality.
    - deleted 6y ago
      [deleted]
    - lotsofpulp 6y ago
      The only solution to that is to raise the minimum standards by making building codes more strict. But that raises the cost of the housing, and then you have people claiming the government is restricting housing development and pricing people out. It's all a very delicate balance that gets thrown way off especially due to the securitization of the asset for 30+ years at artificially low future taxpayer subsidized interest rates. A lot of the calculations about value of fixtures and finishes in a house in a high demand area get de-valued by buyers because the land value (and the land value's increase) is worth so much more than the structure that sits on it, that as a buyer, you can't afford to value things like proper fit and finish and materials unless you're looking at very high value homes, otherwise another buyer will come in and take it.

brendoelfrendo 6y ago

I've seen just about all of the above, and a few more: * Cheap out on just about anything that you need a lot of (knobs, drawer pulls, light switches) * Cut tile or flooring at unusual angles to avoid having to do more complex cuts * Use the cheapest lighting and plumbing fixtures possible I've actually had friends buying new construction homes tell me that they've told the builder NOT to install certain things because they didn't want to be saddled with whatever "builder grade" materials the contractor was going to use. Imagine that! Spending hundreds of thousands of dollars for a new house, but you already don't trust the builder not to cut corners! Where's the craftsmanship?

StillBored 6y ago
MDF: Particularly in most cabinetry. That stuff should be illegal because the cheap plumbing fixtures will invariably leak, and when that happens now your cabinet is ruined too. I think similarly for OSB, and don't believe a word about how its a good building material, but thankfully i've only seen it crumble once so far. Mostly I suspect because its not been in to many buildings for 30+ years of heat and moisture cycling.
- Lammy 6y ago
  OSB's given me way too many splinters to want to work with it even if it's a fine material :p
lotsofpulp 6y ago
> Imagine that! Spending hundreds of thousands of dollars for a new house, but you already don't trust the builder not to cut corners! Where's the craftsmanship? The craftsmanship is there, but 95% of people can’t afford it. It starts all the way from the fact that suppose you and your competitor are looking to purchase a parcel of land to develop a community. You make a nice plan that retains nice old growth trees, gives adequate space for eaves, design better than minimum standards drainage, insulation materials, etc. Your competitor draws up plans and cuts all of those niceties out, and saves a few million dollars on costs. Now the competitor can offer to pay a few million more for the same parcel of land. Guess who gets to develop it?
- brendoelfrendo 6y ago
  I think this is true, but only part of the equation. I think you certainly could build a house at average-suburban-prices without cutting corners, but your profit margins would be lower or you'd have to compromise somewhere else. For example, the market has optimized around square footage, $/sqft is the most important metric for many consumers, ergo a smaller but better built house won't sell (or, at least, won't sell for a price that justifies the extra expense). Nobody ever got rich by leaving money on the table. The disadvantage of living in a seller's market is that it's also a builder's market; when homes sell as fast as they're being built regardless of quality, there's little pressure on builders to improve quality.
  - deleted 6y ago
    [deleted]
  - lotsofpulp 6y ago
    The only solution to that is to raise the minimum standards by making building codes more strict. But that raises the cost of the housing, and then you have people claiming the government is restricting housing development and pricing people out. It's all a very delicate balance that gets thrown way off especially due to the securitization of the asset for 30+ years at artificially low future taxpayer subsidized interest rates. A lot of the calculations about value of fixtures and finishes in a house in a high demand area get de-valued by buyers because the land value (and the land value's increase) is worth so much more than the structure that sits on it, that as a buyer, you can't afford to value things like proper fit and finish and materials unless you're looking at very high value homes, otherwise another buyer will come in and take it.