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Thread: How did middle class/lower class people afford to build houses?

  1. #51
    Cyburbia Administrator Dan's avatar
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    Quote Originally posted by wahday View post
    While this is certainly the way to develop in an affordable manner, construction costs and land costs continue to drive higher prices even on smaller lots in the urbanized area. The response we see here to try and reach this moderate and lower income market (those on the verge of middle class status) is to develop at the urban edge, bring down the land costs (both by buying at the edge and by developing surprisingly small lots) and build at large scales to take advantage of economies of scale.But in this climate, that's a big gamble, too, as homes are not selling at a very fast rate. And, of course, we know that there are hidden costs in this approach as well that are borne by the buyer.
    Economies of scale in production housing are a thing of the past throughout much of the Rust Belt. In smaller metros, the days of building houses by the thousands in postwar suburbia have long past. National homebuilders, with the exception of Ryan, steer clear of smaller Rust Belt metros. In the Buffalo area, there's Ryan, and tens of local mom-and-pop builders (Forbes Capretto, Marrano, Natale, Mordeno, etc). No Pulte, Beazer, Toll Brothers, Ryland, Centex, DR Horton, etc. Subdivisions are much smaller, and even a 50 lot subdivision will take several years to be built out.

    Example:

    Ryan "Florence" in suburban Cleveland - 1,952'^2, starting in the low $150s
    Ryan "Florence" in suburban Rochester - 1,952'^2, starting in the low $180s
    Ryan "Florience" in suburban Syracuse - 1,952'^2, starting in the low $190s.
    Ryan "Florence" in suburban Buffalo - 1,952'^2, starting in the low $230s
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  2. #52
    Cyburbian
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    Speaking of housing affordability away from the coasts I saw a couple episodes on HGTV featuring first time homebuyers. These people were paying sub 150K for comfortably sized houses in Pittsburgh, Nashville and St. Louis. The Pittsburgh couple were even quibbling whether to bid 100K or go up to as much as, gasp, 110K! The house in question was a solidly built brick four square with four bedrooms in what looked like a perfectly decent neighborhood.

    I have two friends who in the last six months moved to Denver from the east coast and they bought perfectly pleasant, ~2500sqft houses on suburban cul de sacs with good schools for between 250K and 300.

    People living on the coasts are in denial about how expensive housing is relative to the rest of America. If you want to stay in New York or California or Washington, that's the price you will need to pay. But if you're willing to migrate to a mid-tier city in the heartlands, the mountain west or the South you will find much more affordable housing.

  3. #53
    Cyburbia Administrator Dan's avatar
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    Bumpies, to add something that's pretty much forgotten about the history of American suburbia.

    Premature subdivision.

    From the 1900s through the 1920s, developers and speculators bought hundreds of square miles of farmland in suburban Buffalo. They subdivided it into tens of thousands of lots, most with 50' to 100' of frontage -- much larger than the 30' de facto standard "Buffalo lots" found in the city.

    At the time, subdivision regulations in New York's cities, towns, and villages had no provisions for guarantee of improvements, performance bonds, or right-of-way acceptance. A town would establish special improvement districts, issue bonds to pay for improvements, and use the district tax revenue to pay off the bonds. This scheme was a kludge, but it worked. Until 1929, when ... you know.



    Revenue to pay off improvement bonds disappeared, as developers and owners walked away from their lots, and the towns took possession for back taxes. The towns also had to pay to maintain hundreds of miles of streets, sidewalks, and utilities, mostly serving nobody. Tonawanda was the poster child for premature subdivision in the era, much like Cape Coral and Lehigh Acres today. Suburban Detroit and Chicago also got hit hard.

    In the case of suburban Buffalo, Erie County started to sell off all those improved lots. Speculators and small developers bought them as a long-term investment. The inventory of cheap, fully improved pre-Depression lots only began to run low in the 1960s. There's still hundreds of vacant pre-Depression lots in the region, mostly in subdivisions that were never improved, or areas where land title was never sorted out.
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  4. #54
    Super Moderator luckless pedestrian's avatar
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    I also think, not to be snarky, that the realty and mortgage industry falsely pushed up the market as well as the economy in the 70's made a marked shift with inflationary pricing and stagnant wages

    My parents purchased their new home in a subdivision outside of Syracuse in 1954 and had a mortgage burning party (as did all their friends) in 1969!

    The 80's really churned things up

    I remember my Dad saying to not buy a house for more than one year's salary - that was the rule back then!

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