Monday, September 4, 2023

Owner Built Homes

One of the driving factors in the rising costs of housing is labor costs. Millennials building. What's wrong with this picture? Together with unprofessionalism in many of the building trades, it aint gonna happen. 

What to do about those issues is anybody's guess. Residential construction is a sketchy business. Like this guy says, unless you're an electrician or plumber or something, there's a lot of drawbacks with many of the trades.

One idea to increase the supply of affordable housing is as follows: There's all of these weekend warrior generation Xers with all kinds of tools. Put them to work. 

There are plenty of vacant residential lots in many urban areas. With a little incentive, these people could build owner built homes on some of these lots. The thing preventing this from happening is probably the difficulty with getting loans for this type of project. 

A lot of generation Xers have a lot of resources, but not enough cash to throw up a house. People usually need a contractors license or documented experience to get an owner builder loan. The FHA could help with this by having a program (a program with benefits) whereby builders with enough collateral could get an insured loan. They're not going to bail on a house if they have, say 30-40% of the cost vested in the property.

These loans should be conditional based on the size and scope of the project. They would need to be in urban areas where revitalization is needed. A maximum size of 1500 square feet would be good. Zoning for ADUs would be a plus. They could build these later, or have someone else build them.

Social Security isn't keeping up with housing costs. Generation Xers could use the ADUs to house their older relatives, or rent them out, this being another incentive. 

This would have many benefits to society, including increasing urban density, as opposed to increasing the supply of single family suburban homes.