Building affordable housing

http://urbankchoze.blogspot.com/2016/08/building-affordable-housing-where-has.html

by JSoet • 9 years ago

56 61 9 years ago

urbankchoze.blogspot.com

TamDenholm• 9 years ago

I think the lack of entry level housing is a massive reason the tiny house movement has become so popular. I think people are willing to reevaluate the space they require to live in so as not to spend a life paying off debt.

ghaff6• 9 years ago

Discussion of tiny houses and pod apartments has become popular (not so much the things themselves) because they offer this tantalizing hope that reducing living space size will decrease rent/mortgage proportionately.

It doesn't for all sort of reasons.

Basic functional blocks like bathrooms and kitchens can only be made so small. And once one graduates from college, shared spaces seem a lot less attractive.

nextos2• 9 years ago

We need more industrial solutions to housing. Cheaper, more efficient and better quality. Something like http://www.kodasema.com/en/

Kluny• 9 years ago

That website is awful. Is it yours? A bunch of links are dead and the auto-playing video made me seasick. I was trying to figure out whether there's a model with a double bed or you're just supposed to stay single forever, but gave up.

nextos2• 9 years ago

No, it's not mine!

I agree it's quite broken. But I still love their house design and concept.

athenot• 9 years ago

One thing that I've seen quite a bit in Europe is people buying "unfinished" homes. They pay a builder to build a concrete structure with a tile roof, and get it plumbed and wired up to code. But then all the interior finishings (and sometimes even the doors/windows) are done by the owners, by trading a couple years of spare time for substantial cost savings.

tuanx5• 9 years ago

I heard about something similar in Chile on a 99% Invisible podcast. http://99percentinvisible.org/episode/half-a-house/

ghaff6• 9 years ago

The idea isn't really all that much different from buying a "fixer-upper" though. A lot of people (like myself) buy a house in a location we like on property that we like that clearly needs a lot of updating and we do it over time, some of it ourselves, some of it (usually) with contractors. In my case, I'm not sure how much money had been put into the house over at least the previous 50 years.

seanmcdirmid• 9 years ago

That is the norm in china. In fact, renovated homes cost less than unrenovated ones because no one trusts anyone else's renovation (lots of cheap toxic crap), so it is understood that new owners would re renovate anyways. Basically, everyone just wants a concrete box. Renovations are quite cheap and quick however with the appropriate migrant worker (though see above, you have to be careful they don't use cheap toxic crap).

maxxxxx• 9 years ago

That's how my family and all my neighbors did it. I remember our area was a construction site for years.

CapitalistCartr4• 9 years ago

In every American city I know, 80%-90% of the cost of an existing home is the lot, not the house. I don't know how to overcome this, but I understand it is caused by politics, suggesting it needs a political solution.

When Florida was abuilding like crazy after WWII for the next 25 years, the lot was usually about 10%.

dhd415• 9 years ago

I suspect your familiarity is with areas that are much higher cost than average. I've owned houses in two different MSAs in the top 25 in the US and the land value was much lower than 80% of the total value. Land value is also very demand-driven though local zoning regulations (multi-family units, proximity to commercial zones, etc.) do drive some of that demand.

CapitalistCartr4• 9 years ago

Yeah, my familiarity is with the city proper, original streetcar suburbs, etc. I know modern suburbia is cheaper the further one travels from the city center, but this seems just another high price.

Also, I judge the lot value by how much it would sell for without the house. The price for empty (fill-in) lots is ridiculous. I'm all for the market setting prices, but this isn't that. This is Federal interference and local building lobbying.

verg• 9 years ago

If only there were some technology that would allow multiple homes to exist on a single lot...

cylinder• 9 years ago

That would just be priced into the lot.

People are going to spend 35-50% of their incomes on housing.

CapitalistCartr4• 9 years ago

Federal mortgage regulations are strongly biased against that. And in the USA the Federal gov't. owns the mortgage industry.

erentz2• 9 years ago

Where is this? In Seattle the cost of construction is around $250-300 per sqft assuming mid-range quality of materials and a flat(-ish) site. You'd need to spend between $200-$500k to buy a lot in Seattle. So a reasonable 2,000 sqft house is going to be anywhere from 70-50% of the cost.

CapitalistCartr4• 9 years ago

That's a new house. The weird thing is how often old houses don't sell for much more than an empty lot in single-family home neighborhoods. Although I'm not familiar with Seattle. I've lived in various parts of Florida, Denver (long ago), Michigan, Texas, etc. Mostly Sunbelt.

ksec• 9 years ago

Is that the cost for house? Do you have any data on building prices per sqft for High rise building?

_m8fo5• 9 years ago

Tiny homes are 150 to 250 square feet homes that that can be built anywhere from ~$20,000 to ~$50,000. The person who figures out how to mass produce these houses (each one is only about maybe the size of two RVs) for ~$10,000 will change this world.

ghaff6• 9 years ago

So what land is your tiny one story home going to sit on (and be connected to utilities)? Of course, if you're flexible where you live such things exist and are called mobile homes.

_m8fo5• 9 years ago

There's plenty of land in the United States. Maybe it'll sit on some of that?

mrefish• 9 years ago

I ran across the Reefer Home for $12,900 a few days back.

Description:

- 40ft x 9″6″ High Used reefer container.

- Bathroom with shower.

- Kitchenette.

- Electricity.

- Two large glass sliding doors.

- Security Bars on Doors.

- Painted

Link: https://containerhomes.net/products_prices/reefer-home-12900...

Video walk through: https://www.youtube.com/watch?v=xeM1ed7Wrl0

leakybit• 9 years ago

I could easily build a 250 sqft home for $10,000 excluding the foundation.

_m8fo5• 9 years ago

1. Why exclude the foundation from the cost? It's necessary, no?

2. Can they be mass produced? You should start a business if so.

nosuchthing• 9 years ago

Why not mobile?

Elio motors designed an enclosed motorcycle for ~$7300.

Assuming a design like an enclosed TukTuk moped [1], a mini motor home would actually change the world overnight.

[1] http://www.designboom.com/design/cornelius-comanns-bufalino/

baursak6• 9 years ago

In places were housing is expensive, land will be the majority of the cost. In places where land is cheap, housing is already not expensive.

The way to affordable housing is high density, mid-to-high rise condos.

fnl2• 9 years ago

Isn't that precisely the way cities are built in Europe? If so, housing isn't necessarily cheap/affordable there, either.

maxsilver3• 9 years ago

The way to affordable housing is high density, mid-to-high rise condos.

How though? Density sounds good on paper, and has tons of side benefits, but (as the blog post explains) the cost of land + construction jumps significantly.

I know here in the US, there basically is no such thing as "affordable high density condos". High density urban housing is expensive, by definition. So much so that there isn't a single unsubsidized affordable high-density urban housing unit in my entire state.

The only place I'm aware of that has affordable urban housing is Japan. And that's mainly due to a combination of having no meaningful population growth, and having excellent public transit literally everywhere. Two things the US simply can't have in our lifetime

lawpoop• 9 years ago

We already have them; they're called mobile homes.

kevinburke2• 9 years ago

Here's one proposal for affordable housing in San Francisco: modular units that are extremely cheap to assemble and can be combined into a much larger building.

The developer can have them here instantly and wants to build on a plot near Cesar Chavez and rent to the city. The city's not interested because the buildings are not built here and they'd be a little more expensive than existing SRO's.

http://sf.curbed.com/2016/10/31/13481254/micropad-tour-patri...

twelvechairs2• 9 years ago

Why not just build an apartment block? Do you really need the flexibility of being able to move units out?

jseliger• 9 years ago

The problem in SF is not the cost of physical building itself. The problem is zoning, permitting, legal, harassment lawsuits, etc.: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o.... Or see https://techcrunch.com/2014/04/14/sf-housing.

Fixing the problem is almost entirely about regulatory / legal issues.

kevinburke2• 9 years ago

I guess that's why I left that comment: solutions exist, the problems are more about political will.

twelvechairs2• 9 years ago

Of course the other option is rebuilding low scale areas around existing train stations as high density apartments.

The game has changed for most big cities since post wwii mass housing. Jobs are more focussed in fewer places and cities are much larger so getting into the city can be very hard from outer suburbs.

The UK is a good example for thr models discussed. It has been building small houses for a long time (like 150sqm lots) and have a minimum density requirement across the country to make this happen (which is also about retaining farmland in the longer term). Too many too far from jobs though its exacerbating englands divide between haves (in london and some other places - large and small) and have nots (in towns and accretions to towns with more people than jobs)

patrickyeon• 9 years ago

The most novel part of that article for me was all the way at the end:

But what about the existing starter homes built after WWII, aren't they still affordable?
Well, no. The big problem of a starter home is that it's only cheap when it is first built, because it is barebone. Once the owners start making the house theirs to accommodate the growing needs of the family, the house gets bigger and more luxurious. Every addition to the house results in higher market value because of increased desirability. So once the original owners are ready to move out, the house is no longer a starter home, but a big, well-furnished home from which the owner will expect to recover the costs of remodeling.
That is the issue of the "starter home" or "grow home" idea. That home is only affordable once, for its first owners. So for every generation to get its "starter home", every generation has to build entirely new neighborhoods in greenfield areas, where land is cheap. When a metropolitan area matures, this ideal no longer works, the greenfield areas are just too far and are disconnected from the city. So, what can be done?

Not only is it expensive to buy a home, you can't even buy one cheap that somebody else got for cheap because they've (likely) made it more valuable by making it more liveable for themselves!

elihu2• 9 years ago

What was novel to me but seemingly obvious now that it's been pointed out is how the introduction of cars and highways created a vast oversupply of usable land that previously wasn't practical to build on because workers had no way to get to their city jobs, and that's a big part of why housing was so cheap after WWII.

Perhaps the lesson here is that if we want affordable housing, we need better forms of high-volume transportation that can move people rapidly between city centers and distant under-developed outskirts.

gwbas1c• 9 years ago

Not only is it expensive to buy a home, you can't even buy one cheap that somebody else got for cheap because they've (likely) made it more valuable by making it more liveable for themselves!

The first thing I did when I bought my home was fix the "problem" that made it sit on the market so long and sell for a discount.

(Fortunately, it was a landscaping problem that was easy for me to fix, but harder for other buyers to fix.)

Now I expect to, at a minimum, make my investment back if I sell the home.

tejohnso• 9 years ago

Most people talk about land being the main cost barrier, but there are plenty of other costs that add up to the point where you're better off buying a standard resale home.

Having acquired land and being accustomed to living in ~600sqft all my adult life I thought I could build a reasonable living space for about $50,000. Once I started looking into it I ran into:

  - land clearing / prep ~$10,000
  - utility hookups and equipment ~$15,000
  - impact fees & permitting ~$5,000
  - foundation ~$5,000

Then comes the actual house construction. I was hoping for a company that would provide a livable shell that I could then improve upon while living in it. Long story short, it just didn't work out at the price I was hoping for.

ek750• 9 years ago

I'm curious if you would share the additional costs you found beyond the land/clearing. And what area of the country are you looking at?

elihu2• 9 years ago

Something I've been thinking about on and off since YC announced their "New Cities" research project [1] is whether you could create more affordable cities from scratch in undeveloped land as a sort of speculative public-interest investment.

Suppose you begin with a large lump of money sufficient to buy at least several square miles of rural land and to pay for some basic infrastructure (roads, power lines, sewer, etc..).

At first, you practically give plots of land away to anyone willing to build a house. (Since it's rural, there's little reason to be there unless there's some critical mass of people already there.) Then, as people start moving in, you can raise the price of the lots to recover some of your initial investment and pay for additional infrastructure. Eventually, you should be able to sell lots at far more than the original land cost and recover your investment. This might also spare residents from having to pay taxes until the city is fully grown and there are no more lots to sell.

Some thoughts:

The new city should ideally be near at least some neighboring town with schools, stores, a hospital, and so on to make bootstrapping easier.

This would be an easier sell both to county government and prospective citizens if it were managed by a non-profit institution that is contractually obligated to re-invest profits back into the city. This could be similar to a normal city government, except that in this case the city starts off by owning all the buildable lots.

Partnering with a University that wants to build a new campus on cheap land would be ideal.

Figuring out the right amount of land to buy up-front would be difficult. Too much and it's too expensive and you never sell it all, too little and you'll end up having to buy more adjacent land later at steeply inflated prices or let some other developer buy it and let them absorb all the profits without re-investing it back into the city.

[1] https://news.ycombinator.com/item?id=11987032

aplomb• 9 years ago

One angle to make housing affordable is to outlaw mortgage products beyond 15 years (along with ARMs), require 20% down, and eliminate the tax deduction on interest - of course you can't do this overnight.

Housing is a basic necessity and we need to get the rampant speculation and financialization out - we're all stuck in this game of musical houses waiting for the music to stop.

sokoloff• 9 years ago

I believe that would decrease upward financial mobility. It still might be a good idea, but that would be a dramatic drag on home buying, which means anyone who currently owns rental property would see a sustainable uptick in demand, keeping a lot of middle class from ever leaving the world of renting.

Mortgage interest deduction being eliminated for owner-occupied housing I would support a transition to. Loan interest for business expenses [to include a loan secured by property, aka a "mortgage"] should continue to be a valid business deduction, meaning that renters would live in buildings that had tax deductible mortgage interest while owner-occupants wouldn't. If you're trying to pull the tax support for house prices, this won't entirely do it. I strongly oppose taking away business loan interest deductions as that harms a LOT of businesses.

I don't see anything wrong with ARMs. Most of Europe has ARMs as the standard/normal mortgage product. Interest-only, NINJA/liar loans, ARMs with introductory discounted rates are more problematic, but there's nothing wrong with a mortgage being adjustable, IMO.

Building affordable housing

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