“The economics of the housing market, and the local rules that shape it, have squeezed out entry-level homes.” writes Emily Badger for The New York Times. “The disappearance of such affordable homes is central to the American housing crisis. The nation has a deepening shortage of housing. But, more specifically, there isn’t enough of this housing: small, no-frills homes that would give a family new to the country or a young couple with student debt a foothold to build equity.”
Starter homes were once ubiquitous in the US. They included shotgun homes, bungalows, mill worker’s cottages, split-levels, two-bedroom tract homes, ramblers, brick rowhouses, duplexes and triple-deckers. Today those houses have all but vanished from new construction. According to CoreLogic, almost 70 percent of houses were 1,400 square feet or less in the 1940s. Now they number only about 8 percent.
Some of those smaller homes were still being built as recently as the 1990s but since then the rising costs of land, construction materials and government fees, along with single-family zoning, have led to larger homes being built. This despite the dwindling size of the typical American household over the last few decades. And those entry-level homes of the past are now selling for half a million dollars or more.
Builders and communities may need to rethink what a Starter Home might be. The easiest way to produce more entry-level housing on increasingly expensive land is to build more of it on less land. Maybe duplexes, rowhouses or condos? This makes sense for everyone. Builders will reap the same profit margins for entry-level housing – that they are smaller is offset by the fact that demand is high. For homeowners a small starter home provides an opportunity to gain a foothold in the housing market and a path to building wealth.
Daniel Parolek, author of the book Missing Middle Housing says: “We need to shift our culture away from this dependency on single-family detached housing and thinking it’s the only solution.” Listen to my interview with Daniel here. … and read the original article here.
Mid Century Starter homes Hammond Indiana by Eric Allix Rogers, CC BY-NC-ND 2.0