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What is affordable housing?

Started by Larry, December 30, 2006, 12:24:03 PM

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Larry

Ron had a few posts on his 2007 poll about the housing market.  What is affordable housing?  Yesterday's newspaper said the average home price is $190,000 in northwest Arkansas.  That is an increase of $65,000 in the last 5 years.  Moreover, some of the real estate sales people call homes at this price a "starter home".

One of the locale TV stations did a report a while back and could not find any new houses on the market for less than $100,000.

I dunno, but with those kind of prices I sure would not call it affordable housing.  What kind of prices are houses going for in yur neck of the woods?  Any opportunities here?
Larry, making useful and beautiful things out of the most environmental friendly material on the planet.

We need to insure our customers understand the importance of our craft.

Fla._Deadheader


Unless you are in a place with little or no building code, I can't see building for much less than $100,000.00 after paying Architects, planners, permits and maybe zone variances. Unless you can do ALL the construction yourself, and then, what's your time worth ???

  I looked real hard at that same issue, before I left Florida. I can't imagine young folks starting out. Even RENT is high. Thought about a trailer park in Alabama, once. Used trailers to rent, with option to buy. Still get lot rent after sales.
All truth passes through three stages:
   First, it is ridiculed;
   Second, it is violently opposed; and
   Third, it is accepted as self-evident.

-- Arthur Schopenhauer (1788-1860)

DanG

That's a real good question, Larry.  There seems to be a dominant mentality these days, that IF a person can scrape together the monthly payment, provided there are no unexpected expenses, then that person can afford it. ??? ::)  This way of "thinking" is gonna really burn some people, IMHO.  A lot of them will get away with it, but those are just the lucky ones who don't happen to get "down-sized" or meet with some other misfortune.

Now, on a personal level, I set aside $80,000 with which to build my house.  I plan to do it for that amount by doing the work myself, and producing much of the material myself.  I've been told that I can't do it, but some of those opinions have changed when I explained just how I plan to proceed.  For instance, one Gen. Contractor told me the drywall alone would cost me 14 grand.  Sez I, "there ain't gonna be no drywall.  All the walls and ceilings are coming right off my mill."  "Oh." he sez. :D  Some friends and I are doing the concrete work, then another friend is chomping at the bit to help me with the block work.  I'll probably hire a couple of guys to supplement the volunteer framing crew.  Depending on how the budget is going at the time, I may hire out the roof, but I can get it done if I can't afford the labor.  Yada yada, blah blah blah.  Ya see how this is going? :D :D  If I had less than 80 grand, then I'd build less house.  I could certainly live comfortably in less than 1850 sq ft, and get by with less than 157 feet of 9' wide porch, but I ain't got to. ;D  That is my definition of "affordable."

FDH, I figger this house would cost well over $200,000 to have someone just come in and do it.  I guess my time is worth about $120,000, eh? :D 8) 8)
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

farmerdoug

DanG, that is what we call "sweat equity".  I think it is great that you are doing it yourself. 8) 8) 8)

On the other hand, most people do not want to be bothered going it themselves so solve the problem with money.  They consider you involment being to one walking in a turning on the lights work. ::)

Farmerdoug
Doug
Truck Farmer/Greenhouse grower
2001 LT40HDD42 Super with Command Control and AccuSet, 42 hp Kubota diesel
Fargo, MI

Don P

That works as a retiree and somewhere along that path is where alot of my work goes. I had to turn down a young couple several weeks ago. I couldn't make it work and didn't want them stuck between a rock and a hard place. They are the displaced descendents of the land in the upscale community I've been working in  :-\. Young couples are often chasing the dollar for payments and have rearing obligations to contribute much labor, no matter how much they think they can. I've been worked to death on those promises before  :D. 

If you can stay within prescriptive provisions of the code, the so called "cookbook" house, that drops the architect/engineering requirements, its a fairly simple house, and the reason for those provisions. We are also building monsters compared to 20-30 years ago, my labor bids now exceed my Dad's turnkey prices of his era.
I sent a retired engineer to Superior walls website the other day after touring him around. I showed him the basement and then took him into the detached garage with a living area in the trusses upstairs. I think a combination of the two could make a very cost effective, low maintenance, sound building.

Chris Burchfield

This week I ordered a "Gulf Coase Emergency House Plans of the Catrina Cottages." Published by The New Urban Guild Foundation out of Miami Beach. There were several principal architects involve however, Andres Duany and Marianne Cusato provided the first couple of Katrina Houses that came to light.

I'm dealing with a son, DIL and Madison Amanda Burchfield all of which I do love. I've tried to explain that I didn't start off in a mansion and 1574 sq feet of heated don't meet that now. But with four adults and a baby it does get close.

The Katrina houses were of course for disaster relief. There were two thing about these I found intersting. First, it was something that would last, permanent in design and would withstand 200 mph hurricane force winds. Second, they could be a great starter home, added to and were not cheaper but more cost effective that them trailers. Course, them trailers won't stand up to a 200 mph hurricane.

Lowe's is suppose to be offing the different models spring of 97 in 30 of their Gulf Coast stores. The smaller ones to be about $35,000  and sleeps 4 people. Mean while the Feds have been spending about $70,000 for them trailers.

The plans are costly $700+ to 1500+, in my opinion. I figure I could approach a local architect, with my own schetch, ask for conversion to oak and go from there.
Woodmizer LT40SH W/Command Control; 51HP Cat, Memphis TN.

Fla._Deadheader


DanG, looks like we are in agreement ???  ::) ::) ::)

  Being retired gives you time, and friends give you needed labor. That's great. I was referring to younger folks that don't HAVE time, 'sperense, friends, things that you do have. Your time is worth what you make it to be, and yes, that's about what you are saving.

  Also, you own the land. Young folks have NADA.  :o :)
All truth passes through three stages:
   First, it is ridiculed;
   Second, it is violently opposed; and
   Third, it is accepted as self-evident.

-- Arthur Schopenhauer (1788-1860)

maple flats

Our retirement home is in the works. We drew up the plans and then had an engineer do the official plans from our drawings, price $700. Next year we will put in the septic, well, I have my own well drill,  run in elec from the road to a pole (230') then underground (230') to a pole with main breakers and from there to the sugarhouse and to the future home when built. Next we will saw the lumber package and air dry it for the home, some logs from our woods but most logs bought. In 2008 we plan to break ground, do the foundation footings, block cellar, cap it, frame walls, trusses (cathedral ceilinged living room home made and speced out by engineer) add 2 main cross beams (box beams from my sawmill) in same, finish roof and put in some of the windows. This will make it weather tite and in the winter-fall 2009 we will finist the rest. For our 1100 SF+ home / full cellar we plan to keep it under $75000. Some of my savings will come from mixing and pouring my own concrete, sawing my own lumber ( some from trees out of my woods) I will make my own mouldings, flooring, many wall surfaces, living room ceiling. This will be a lot of work but it will mean a lot more than hiring some contractor to come in and do poor work or not as we want it. We will be able to say we did it ourselves and be proud of whatever we end up with. Some of this will have me recruiting my 4 kids and 2 son's in law for help but most will be me alone.
I recently saw some program where obviously rather well to do folks were looking at and choosing a vacation home in Maui. Wow, are those high. 3 homes from 1-3 bedrooms and prices $375,000, $475,000 and $650,000. I couldn't even sleep in a home that expensive, nor could anyone foolish enough to lend that much to me for a mortgage. Our home will have a mortgage of $0.00 when done, that I can sleep with.
logging small time for years but just learning how,  2012 36 HP Mahindra tractor, 3point log arch, 8000# class excavator, lifts 2500# and sets logs on mill precisely where needed, Woodland Mills HM130Max , maple syrup a hobby that consumes my time. looking to learn blacksmithing.

Corley5

I built my house from the ground up.  Construction was started in 8/94 and we moved in 3/97.  Everything wooden was produced from material harvested and sawn here on the farm.  When it was all said and done including the well, septic, and driveway this 1,200 sqft house cost me $27,000.00  8) 8) 8)  The biggest expense was the well followed by the metal roof and windows.  I couldn't imagine paying that kind of money for a "starter home"  So what's a "finisher home" go for  ???
Burnt Gunpowder is the Smell Of Freedom

Fla._Deadheader


If ya gotta ask, ya can't afford it.  :D :D :D :D :D :D

  Ed and I re-modeled many 2-8 million $ homes in Florida.  ALL were second homes or "Winter" homes.  ::)
All truth passes through three stages:
   First, it is ridiculed;
   Second, it is violently opposed; and
   Third, it is accepted as self-evident.

-- Arthur Schopenhauer (1788-1860)

Corley5

Quote from: Fla._Deadheader on December 30, 2006, 08:11:10 PM
  Ed and I re-modeled many 2-8 million $ homes in Florida.  ALL were second homes or "Winter" homes.  ::)

We've got new houses around this country like that only they're summer homes  ::)  Most only see a few weekends use a summer and maybe a couple in the winter for skiing.  Must be nice  ???
Burnt Gunpowder is the Smell Of Freedom

Tom_Averwater

I've seen some starter homes for $ 130,000 to $150,000 around Cincinnati , Ohio. I've been working on mostly $ 500,000 and up houses for the past 20 years.
He who dies with the most toys wins .

Don_Papenburg

I built mine myself for the most part .  It is poured insulated concrete . At the time I poured it cost the same as stick frameing.  I have a full front porch 8' x48' , with a full crawlspace floor 7and 1/2 ' below the porch floor.   Makes it easier to crawl around under the porch standing up.   I also built curved walls and doors  then I run plaster crownmolding in the rooms with curved walls .  That was a learning experiance.  I wish I would have kept better tabs on my expense .  But it will be motgage free when done in a year or two.
Frick saw mill  '58   820 John Deere power. Diamond T trucks

Ron Wenrich

On the way home tonight, I passed a new development going in and my wife And I figured those homes to be in the $300,000 price range.  We might be low.

Then we thought back to what we could afford when we bought our home.  To put things into perspective, I figured things at a percentage of our income.  We bought our house for $45k thirty years ago.  Our combined income was about $30k per year and our mortgage payment about $325/mo.  Taxes were fairly low and our insurance still doesn't cost too much.  We also had 20% down on a 20 year mortgage and there was no such things as points.

At that rate, we bought a house that was 1.5 times our annual income.  Our mortgage payments were about 13% of our income.  The house did need some repairs, but it was what we wanted and what we could afford.  New homes might have been another 10-20k.

If I use those same guidelines to buy a house today, I wouldn't be able to afford a new house. 

There still is affordable housing in cities.  These are usually in poor areas, and could be revamped.  If developers would put as much energy into developing areas of towns instead of tearing up farmland, it would be a much better prospect for towns and farms.  Housing prices could come down and better communities could be built. 

Unfortunately the mindset of the consumer is bigger and better and I want it now.  They end up renting their houses from the bank instead of building equity.  People will never know freedom until they are out of debt. 
Never under estimate the power of stupid people in large groups.

pigman

I live in a fairly modest ranch house, but as Ron would say "I am free"


Bob
Things turn out best for people who make the best of how things turn out.

DanG

Quote from: Chris Burchfield on December 30, 2006, 02:47:00 PM


The Katrina houses were of course for disaster relief.

Noop!  The "Katrina" houses were intended to get some rich fat cats even richer and fatter.  Same with the trailers.  The "houses" were really worth maybe $3500, and the trailers even less!  Thanks to Chertoff and "Brownie" for that!  Those people don't have a clue as to what it takes to build an emergency shelter, since they wouldn't know an emergency if it bit them on the ass.  Those little shacks would never stand up to 200mph winds, let alone the tornadoes and floods that come along with them.  Same for the trailers.  You can buy a 28x80 doublewide modular home for $70,000! >:( >:(
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

Norwiscutter

I plan on starting construction in the next two years on a plan that I have in mind. About 1600 feet plus a basement and figure I can do it for under 75,000 including labor that doesn't count me.  I have two houses lined up for this summer that will be in the 1200 square foot/not counting basement with a price range of around 100/ sq ft. It is nice having your own way to process materials because you can give your customers a better quality product for a reasonable price.  When my compitition won't work for under 150/sq. ft. it is fairly easy to find work from the real people that can't afford 250,000 houses.  I feel bad because I know that a person I build a house for is walking into a 160,000 a year morgage with the cost of land but often times they still feel like they got a deal.  I plan on building a 1600 ft house and that feels like a mansion compared to what I have now.  People are so strange, they put their kids in rooms across the house, subcontract their parenting duties to a daycare center, then can't understand why their kids are doing drugs at the age of 14.   :(
Si vis pacem, para bellum.

woodmills1

for a comparison, most of the new buildable lots in my area run from 80 to 160 thousand.  For that you get an approved lot, capable of getting a building permit, and usually a septic design or sewage and water hookup locations.  These lots are in the 1 to 3 acre range.  There are a few avaliable smaller lots in certain sections of town but they are nearly 80 grand also.

My town also has a number of impact fees associated with new development/construction.  These fees are supposed to help defray the costs of infrastucture improvements triggered by increase in the towns population.  They include assessments for road, fire and police, schools, library etc. and can run from 8 to 16 grand based on the part of town the site is in.

If the land that a new subdivision is on had been enrolled in a state land preservation program called current use taxation then a penalty must be paid when the land use is converted to housing.  This cost is usually passed on to the buyer and is set at 10% of the market value of the lot.  My land is in that program and it would cost me 16 thou to put up a new house on it, plus the impact fees.

Some new hampshire towns have also started to institute a so called views tax for lots with good overlooks

On a different note we are seeing an explosion of strip malls.  One is being built, 2 in planning, one in preplanning and a major town center mall being proposed for conversion of the 36 hole golf course in town.
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

DanG

Woodmills, it sounds like folks up your way are trying to price the riff-raff out of the market. ::)  Who is going to work in the stores in all those strip malls?  Are they going to pay the help a hundred grand per year so he can live there?  I seriously doubt it.

The fees for building here are quite different.  It cost me $50 for the Growth Management guy to come out and approve my site.  Another $75 went to the Property Appraiser to cover the cost of raising my taxes. ::)  My septic permit was $350, which included the soil test and all inspections.  The building permit itself was about $1500, which also includes all inspections.  Most folks gripe about the "dirty politics" in this county, but I think they've done pretty well at keeping things affordable.

I wonder how much your county is going to charge for a view of the abandoned shopping center? :D :D
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

Coon

My neighbors son was home for Christmas from High River, Alberta where he is a housing contractor.  All his company does is the framing of these houses.  The company consists of 2 brothers and 2 other employees.  they framed up 180 houses in 2006 alone.  Keving told us that with the housing shortage in that area rent is sky high.  For a 1 bedroom, very small apartment they are charging minimum of $1000/month rent.  For a small 2 bedroom house rent starts at $1500/ month.  Who could afford to live in a place like that?  Kevin went on to tell us that just a basic lot with water, sewer, and power to the property line you are looking at $90,000 for a small lot which is about 60'x 110'.  Heck here in Saskatchewan you can buy 160 acres of land with a house, barn, and other outbuildigs along with good water on the property for that.  Not to mention the taxes are alot cheaper too.  The only problem is that there is basically nothing for jobs in the area unless you want to farm or work in town for minimum wage.

Brad.
Norwood Lumbermate 2000 w/Kohler,
Husqvarna, Stihl and, Jonsereds Saws

woodmills1

yes we are getting priced out.  Many kids who grew up here cannot afford to buy so they move farther north.
James Mills,Lovely wife,collect old tools,vacuuming fool,36 bdft/hr,oak paper cutter,ebonic yooper rapper nauga seller, Blue Ox? its not fast, 2 cat family, LT70,edger, 375 bd ft/hr, we like Bob,free heat,no oil 12 years,big splitter, baked stuffed lobster, still cuttin the logs dere IAM

SPIKER

we have been seeing similar housing problems for last 20 years cost going up and size coming down, driving farther and farther to get $ enough to pay the rent/mortgage.  my brother is a drywall installer by trade, last year he worked on probably 50 homes prices starting probably 150K+ and ave probably 230K.   this year he has only been on probably 10~15 homes. prices starting in the 120K & up.   we are seeing a price drop because there are so many spec homes setting empty...   one of his builders has some 10 condos setting empty.   he hasn't been able to pay his rent on his place consistently either.   because of lack of work.     urban sprawl has gotten worse which makes gas & cost of living worse commute time going way up and local pay going down to plants/factories closing.   lots of auto manufacture dependent companies with the big auto mfgs doing less business sending more over seas and such the housing market is full.  no one is able to fully afford to buy NEW or even STARTER homes.    it is getting pretty popular to buy old farm homes tear out and re build add a porch ect & sell for a big profit.   (flipping homes)   something that generally works out not all that great anymore.  10 years ago it started here.   now people are wise to fact that they won't sell a home worth of flipping for a price that a profit can be made. so there goes any FIXER UPPERS that used to be able to be bought for 30K...   I recently sold my fixer-upper on land contract which I bought way back in 87, the $ from it is going into bank to finish my building I started in 01 but didn't have the $ to finish.   I don't have a mill so milling my own lumber isn't an option.   I am going to be taking some of the logs from my land shortly to a mill to make flooring & trim...   lots of spalted maple & slipperly elm should make some nice flooring...

mark M
I'm looking for help all the shrinks have given up on me :o

Raider Bill

Quote from: Don_Papenburg on December 30, 2006, 09:35:28 PM
I built mine myself for the most part .  It is poured insulated concrete . At the time I poured it cost the same as stick frameing.  I have a full front porch 8' x48' , with a full crawlspace floor 7and 1/2 ' below the porch floor.   Makes it easier to crawl around under the porch standing up.   I also built curved walls and doors  then I run plaster crownmolding in the rooms with curved walls .  That was a learning experiance.  I wish I would have kept better tabs on my expense .  But it will be motgage free when done in a year or two.

Would you use ICF's again?
The First 70 years of childhood is always the hardest.

logman

I built my 1400 sq. ft. timber frame home for about $65 a sq. ft.  We did almost all the work
ourselves.  As far as sweat equity goes, isn't it all?  You either do the work and save money
or pay someone 3 times as much and then spend 15 to 30 years sweating for someone
else to pay for it.  We didn't skrimp either.  We have solid surface counters, all wood interior,
slate and heart pine floors, corner jacuzzi, a sauna, sips on the roof and walls, stone
fireplace.  We could have done it even cheaper if I had used wood from my mill instead of
HD or Lowe's.  Just didn't have the time to cut and dry it all.  Our home is probably worth
2 1/2 to 3 times what we built it for. 
LT40HD, 12' ext, 5105 JD tractor, Genie GTH5519 telehandler
M&K Timber Works

Larry

Seems most of you are saying either sweat equity or downsizing is the way to affordable housing.  And logman nailed the sweat equity...pay me now or over the next 30 years.  Both work...downsizing works year after year with reduced energy costs.

DanG, had an interesting comment about using lumber off the mill in lieu of drywall.

Any other ideas to reduce costs?  Seems earth sheltered homes were popular few years ago but I don't see many, or hear much about them anymore.  ICF's (insulated concrete forms) seem to be the buzzword now.  Course ya gotta go to a school to learn the trade and from what I've read the cost is running higher than conventional construction.
Larry, making useful and beautiful things out of the most environmental friendly material on the planet.

We need to insure our customers understand the importance of our craft.

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