Home News Opinion: I’ve been building homes for 40 years, and here’s what has to change if the U.S. wants more starter homes

Opinion: I’ve been building homes for 40 years, and here’s what has to change if the U.S. wants more starter homes

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As a savanna-based homebuilder with over 40 years of experience, I’ve seen every year that it’s getting harder and harder to build entry-level homes.

I’m not alone. There are many reasons why builders across the United States can’t build affordable homes for important first-time homebuyers. Rising costs due to historically high prices of wood and other building materials, supply chain bottlenecks that still exist for two years COVID-19 outbreaks have begun, followed by soaring interest rates, over-regulation, over-regulation Strict building standards, excessive zoning and density requirements, and a permanent shortage of construction workers.

Finding and enacting solutions to these housing challenges is important to meet the housing needs of all Americans. To make housing a top priority, we need policy makers at all levels of government.

Since the start of the price of pandemic timber
LB00,
-5.49%

Even after recording a significant decline in the last few weeks, it has now risen by nearly 75% and is now over $ 600 per $ 1,000 board foot.

This has been a particularly big blow to first-time homebuyers, but it’s not a complete story. The 25-year historical, pre-pandemic average price of lumber (1995-2019) was $ 343 per 1000 board feet. Timber prices were $ 1,500 per 1,000 board feet last May, trading above $ 1,000, which was previously unthinkable for most of the past year.

As a result, on average, timber prices have been lower since the spring of 2020. Added $ 14,300 to the price Of a typical single-family home.

To mitigate this unprecedented rise in timber prices since early 2020, federal policymakers can start by increasing timber production from federal land in an environmentally responsible manner. Today, timber production on federal land is less than 2 billion board feet. It was over 10 billion board feet in the 1990s.

Also, the United States depends on Canada for nearly 30% of its lumber supply, allowing the Biden administration to put an end to Canadian timber tariffs imposed by the Trump administration in 2017. Currently, the 17.99% tariff artificially raises the price of timber. Acts as a tax on American homebuyers.

On the tax side of the ledger, the 2017 tax law changed the mortgage interest deduction (MID), providing tax incentives primarily for wealthy homeowners.A better policy is to discard the MID $ 15,000 to make home ownership accessible to working class families, first refundable homebuyer tax deductions.

“” Rents are rising because renters cannot afford to enter the starter home. And those who buy a starter home can’t move up because they can’t afford what was an entry home five years ago.

On the labor side, Congress can demand more money for vocational training instead of focusing on four-year colleges. With a shortage of 449,000 construction workers nationwide, housing construction projects are delayed and housing costs are rising. These are high paid jobs (The average wage in the United States is $ 45,760, but half of the salaried workers in the construction industry earn more than $ 49,000.), And we need more electricians, plumbers, framing crews and other skilled workers

Second, the cost of regulation is high. The study published by the NAHB is subject to regulations imposed by all levels of government. $ 93,870 (or 24%) of the average selling price of a new single-family home ($ 397,300)When Over 40% of the cost of apartment developerst.

Few argue that safety standards for construction workers are unnecessary, but these high regulatory costs raise questions about how thoroughly the government is considering the consequences. For example, one academic study found that it took an average of 788 days to prepare submissions and obtain approval for individual federal wetland permits...

Also, builders across the country often have to face delays of up to several months in starting new projects due to zoning and fragmentation requirements, slow permitting processes, and NIMBY opposition.

Regional design standards that have nothing to do with safety have become commonplace. For example, you need brick siding. This can cost about three times as much as vinyl siding. In some areas, builders are demanding that land be dedicated to the government for parks and schools, or otherwise left unconstructed. The cost must be recovered at the price of the house.

Of course, most homes are local, and in many areas, non-specific factors such as community awareness, expectations, and demand also play an important role in determining home availability and cost. ..

To help builders produce entry-level homes in their local communities, state and local authorities have overturned inefficient zoning rules, reduced impact fees and other prepaid taxes associated with homebuilding, and Housing types, including multi-family, should facilitate approval of affordable projects, relax restrictions on density and growth, and allow range.

These are the most important practical solutions to enable builders to build homes at entry-level prices.

First-time homebuyers are the cornerstone of the entire buying process, so it’s important that we all succeed in this effort. Rents are rising because renters cannot afford to enter the starter home. And those who buy a starter home can’t move up because they can’t afford what was an entry home five years ago.

Builders desperately want to seize this huge underutilized market, but unfortunately it is becoming increasingly economically infeasible. Neither the public sector nor the private sector can address the challenges on their own. But if officials at all levels of government introduced the above policy solutions, this would bend the rising cost curve, with more builders putting the first rungs on more American homeowner ladders. Allows you to build more homes at the price you can get.

Jerry Konter is the founder and president of Konter Quality Homes in Savannah, Georgia. National Association of Home Builders..

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