What happened to the homebuilding industry?

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#1
It's easy to wax nostalgic about how things used to be better "back in the day", but I would argue that this really holds true when it comes to home construction. Older homes, by and large, have stood the test of time in terms of quality, while new construction (particularly in the past decade) seems to be too often plagued with shoddy workmanship and inferior materials. No doubt builders in decades past cut corners as well, but the overall reputation of the industry wasn't marred like it is today. Customer satisfaction with the major home-building companies is at an all-time low, and buyer-builder lawsuits are far too common based on seemingly constant media reports. Successfully negotiating a new home build and being satisfied with the finished product? Good luck, and make sure you're hyper-vigilant about dealing with the various contractors through every step of the process. Maybe that's not entirely fair, but it does seem like the process is more challenging than it should be.

No doubt there are still a number of quality builders in the industry, but popular perception appears to be that there's a "race to the bottom" taking place as developers look to squeeze out profit margins to satisfy investors. This really manifested itself in the last housing bubble, from which the industry is still ailing. Of course the external factors need to be part of the discussion: availability of financing, labor supply, regulatory pressures, and the complicity of government and financial institutions in the whole mess. Yet consider: could it be that a big reason for sluggish new home starts is buyer preference for resales/older homes? How many potential new home buyers are too fearful of working with builders due to a lack of trust?

As we ponder the future growth of our communities as planners, what are your thoughts on the current state and future of homebuilding? Do you feel that the industry can fully recover from the great recession, win back its reputation, and regain its place as a major force in our national economy?
 

Maister

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#2
I admit my first instinct was to want to reply 'nuh uh, the reality is there were lots of crappy homebuilders in the past and still many good ones around now etc etc....' but it occurs to me the word you keyed in on was perception. You're right, there is undoubtedly a widely perceived belief that housing construction quality took a nosedive while profits climbed the last couple decades. A belief especially fueled during the housing bubble years.

Will the housing construction industry re-take its former place in the economy? Well, fuel/energy prices are currently at record low which makes longer commutes to greenfield development in the exurbs attractive once again. Lending rates are still very low. The environment is right for more construction....but I don't think it will be quite that straightforward. Yes, new home construction is already starting to pick back up, but I'm convinced the industry/demand is going to lag for several years due largely to the PR black eye they took.
 
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#3
There were plenty of craptacular houses built in the 1920s (and earlier) through the 1960s that haven't stood the test of time. Folks just don't think about those houses when they think of older houses because, well, they haven't stood the test of time.

As long as consumers are willing to buy crappy, mass-produced, generic homes in cookie cutter developments, there will be crappy mass-production builders willing to build them.

FWIW, 95% of the infill development that I see in the already built-out neighborhoods around Metro Detroit seems to be of a quality that is substantially better than what is built in the new greenfield developments, regardless of the size of the house or the perceived quality of the neighborhood.
 

AG74683

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#4
I've always thought that the advent of building codes might have something to do with this. Basically, they gave the crappy builders a blueprint to make the lowest quality house they possibly could. Sure, they are designed with public safety in mind, and they aren't a bad thing, however they are simply the minimum. Any time you hear a builder say "Oh yeah, I build it to code", run away.

My rental here was built in 1940, and I can say without a doubt it is higher quality than my parents home built in the 70's or 80's. I'm also curious as to how much "new and improved techniques" comes into play. A lot of the newer construction technology really haven't stood the test of time like the older ways have. The new methods are designed to simplify construction and speed the process up.
 

DVD

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#5
Generally I think a house is a house, but I'll have to say today's methods are better than some of the older ones. New homes are more energy efficient in so many ways. Not to mention the invention of post tension slabs. If you happen to have an old brick house then sure argue the quality of the materials, but the new home can still heat and cool better most of the time. I think the real test is looking at how many homes new vs. old have stood up to hurricanes, earthquakes, and other natural disasters.
 

Suburb Repairman

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#6
Much of what you describe is perception. The city I live in has a ton of substandard housing from the pre-WWII era.

We eventually get to a good quality new house here, but what I'm finding in my area is a lack of qualified, competent general contractors & building trade subcontractors. I've noticed the number of red tags we issue increasing over the last few years. The older ones are hitting retirement, and they are not being backfilled by a newer generation like they once were (college is for everybody phenomenon). And down here, many of the younger ones are being poached by the oil & gas industry to work in shale fracking for big money, although the drop in oil prices may help calm that.

I have developed a distrust for roof truss construction compared to traditional stick construction.

Also, I've been told good quality wood framing lumber is becoming increasingly hard to find. Lots of builders have reported more warped & knotty wood than they encountered in the past.
 
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#7
It seems like what occurs during boom periods is that there is often a shortage of necessary materials, as well as labor, and this can lead builders to cut corners. For example, during the mid-2000s (prior to the crash) builders were using drywall from china because there was a shortage of wallboard made here in the US. Well, it turned out that the chinese stuff gave off toxic fumes (surprise, surprise) and made homes uninhabitable.
 
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#8
I've theorized that planning requirements in the name of aesthetics can come at the expense of more complexity to build where stuff can go wrong. The most efficient and easiest to build home is still the "box" with the garage right in front (which KB made a living off of in the 90's and early 2000's). But the (justifiable) push back from how they looked added articulation and complexity where weaknesses can occur. Stucco or siding on all four sides is more efficient than introducing brick or stone in between that add no structural value and can cause problems at the interfaces.
 

kjel

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#9
I've seen crappy homes from every era....1890s to 2000s.

We deal with the perception that new built is better than a rehabilitated house. Not always the case, at least in the neighborhoods that I work in. The devil is in the details always. Were old building methods superior? Sometimes they were and sometimes they weren't.

I will second that building codes created a race to the bottom. Sure they provide a minimum standard, but that's also a maximum standard for many volume producing builders. Good contractors are hard to find and they don't come cheap. They are aging and retiring and many of the trades are not staffed by immigrants rather than Americans because the trades get short shrift in our educational system. For me it's not necessarily a bad thing because we're equipped to deal with the language/cultural barriers that can arise. Others just think it's cheap labor. The building trades have a lag time in ramping up and down as the market for new homes rises and falls due to the nature of lead time required on projects. Many contractors went out of business in the bust so they are working from a deficit in some areas.

I build quality homes, but they are not cheap to build and require deep subsidies. The trade off though is a truly affordable price for our targeted clients/neighborhoods that result in sustained homeownership. My driving philosophy is that we have to build or rehab a home that will last the duration of the mortgage with regular maintenance and upkeep. In NJ, new home builders are required to provide a limited 10 year home warranty.
 
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#10
One of the things that we have to consider is most people are not comparing apples to apples, but coal to diamonds. For example, the houses that were of poor craftsmanship did not have much longer of a shelf life than the homes of poor craftsmanship that are being built today. The biggest difference is they were torn down and replaced, sometimes 3 or 4 times.

However there are some truths to the perception, partly in the materials that were used and the way the houses were designed. When my house was constructed in 1890, the wood that was used was old growth timber that has very tight growth rings. This resulted in a more dense building material. Additionally, the plaster and lath was a superior product if it was maintained and kept dry. Finally, houses built 100 years ago were designed to breathe. The balloon construction and lack of insulation would result in air circulating between the attic and the basement. This convection and reverse convection system would help dry out the studbays resulting in a longer lasting material.

Finally, the craftsmanship back then was just better. Things were measured and cut by hand, moldings were planed by hand using custom cut planes, ornamentation was not unusual, and houses took time to build. Today a house can be completed in a few weeks to a few months. My house took 3 years to be built.

There are some amazing builders out there today, but I question if they have the same level of craftsmanship as home builders a decade ago.

On a side but related note, I love it when someone tries to sell me new windows. I tell them that I will buy their product if they will guarantee it for 100 years. When they scoff at me and say, no window will last 100 years. I respond, "Mine have been there for 125 years and they still work great."
 
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#11
I've seen crappy homes from every era....1890s to 2000s.

We deal with the perception that new built is better than a rehabilitated house. Not always the case, at least in the neighborhoods that I work in. The devil is in the details always. Were old building methods superior? Sometimes they were and sometimes they weren't.

I will second that building codes created a race to the bottom. Sure they provide a minimum standard, but that's also a maximum standard for many volume producing builders. Good contractors are hard to find and they don't come cheap. They are aging and retiring and many of the trades are not staffed by immigrants rather than Americans because the trades get short shrift in our educational system. For me it's not necessarily a bad thing because we're equipped to deal with the language/cultural barriers that can arise. Others just think it's cheap labor. The building trades have a lag time in ramping up and down as the market for new homes rises and falls due to the nature of lead time required on projects. Many contractors went out of business in the bust so they are working from a deficit in some areas.

I build quality homes, but they are not cheap to build and require deep subsidies. The trade off though is a truly affordable price for our targeted clients/neighborhoods that result in sustained homeownership. My driving philosophy is that we have to build or rehab a home that will last the duration of the mortgage with regular maintenance and upkeep. In NJ, new home builders are required to provide a limited 10 year home warranty.
+1 with the echoing of that there were crappy homes from all eras. I know of worker housing up where I'm from that is pure crap. How they are still standing is beyond me. Kjel is also right about how the trades get a short shrift from our educational system and from our society as a whole. College isn't for everyone and the trades aren't for everyone. However both are valuable. In my case, I'm a good helper, but anything past that is lost on me. I'm mechanically inept and always have been. My place was college and getting a desk job, ultimately becoming a blue shirt. Often times, I wish I was better with my hands. I would have saved me a lot of expense and headaches.
 
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#12
I think a more over-arching problem is where many of these national builders are building homes. For the most part they are still building on the urban fringe in the middle of some greenfield site. Sure, some suburban communities are looking at ways to grow beyond just being a bedroom community, but most are places for good schools and good places to raise a family. They may have some commercial development but it is the typical big-box auto-dominated development. The problem with this type of development is there is little incentive to live in the community once the kids graduate high school. The home lasts their life cycle of 15-20 years before falling into disrepair. Because they were built to the lowest standard, it isn't worth rebuilding them so they become eyesores and the suburban slums that have risen up in the last decade.

The other problem is that we push homeownership so much in this country almost to a fault. IT makes almost more sense to buy than to keep renting. Many developments target the renter, and sell you a house for less than $1,000 a month. The problem is that a 100k house around here gets you the bare bones model in a neighborhood with no sidewalks, postage stamp sized lots, no amenities, usually outside of city limits (no zoning in Texas) aka a place you live for a few years before moving on to bigger and better things.

Suburban Houston (unincorporated county):

Homes from the $90's! Thats a mortgage payment of less than $550 a month!

https://www.google.com/maps/@29.972409,-95.230047,3a,47.8y,61.13h,77.65t/data=!3m4!1e1!3m2!1sYOjMgpqr4E_jm6z00LJULw!2e0

Let's see what that $550/month gets you...

https://www.google.com/maps/@29.9725,-95.228764,3a,75y,180h,90t/data=!3m4!1e1!3m2!1sKa4AbV7hy3UmKqCfgJNEug!2e0

These homes certainly serve an important role, they provide homeownership to many people who want to buy but can't afford a high mortgage payment. The builder sees these homes as pure profit, build a house to code, and copy 100 times. It is the fast food of the housing industry. It provides a room over someone's head but at what cost? Sure a cheap mortgage payment is great but are we doing any favors when that mortgage payment is coupled with high maintenance costs because the home is a piece of crap?
 
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#13
I think a more over-arching problem is where many of these national builders are building homes. For the most part they are still building on the urban fringe in the middle of some greenfield site. Sure, some suburban communities are looking at ways to grow beyond just being a bedroom community, but most are places for good schools and good places to raise a family. They may have some commercial development but it is the typical big-box auto-dominated development. The problem with this type of development is there is little incentive to live in the community once the kids graduate high school. The home lasts their life cycle of 15-20 years before falling into disrepair. Because they were built to the lowest standard, it isn't worth rebuilding them so they become eyesores and the suburban slums that have risen up in the last decade.

The other problem is that we push homeownership so much in this country almost to a fault. IT makes almost more sense to buy than to keep renting. Many developments target the renter, and sell you a house for less than $1,000 a month. The problem is that a 100k house around here gets you the bare bones model in a neighborhood with no sidewalks, postage stamp sized lots, no amenities, usually outside of city limits (no zoning in Texas) aka a place you live for a few years before moving on to bigger and better things.

Suburban Houston (unincorporated county):

Homes from the $90's! Thats a mortgage payment of less than $550 a month!

https://www.google.com/maps/@29.972409,-95.230047,3a,47.8y,61.13h,77.65t/data=!3m4!1e1!3m2!1sYOjMgpqr4E_jm6z00LJULw!2e0

Let's see what that $550/month gets you...

https://www.google.com/maps/@29.9725,-95.228764,3a,75y,180h,90t/data=!3m4!1e1!3m2!1sKa4AbV7hy3UmKqCfgJNEug!2e0

These homes certainly serve an important role, they provide homeownership to many people who want to buy but can't afford a high mortgage payment. The builder sees these homes as pure profit, build a house to code, and copy 100 times. It is the fast food of the housing industry. It provides a room over someone's head but at what cost? Sure a cheap mortgage payment is great but are we doing any favors when that mortgage payment is coupled with high maintenance costs because the home is a piece of crap?
I don't think those houses in Houston look that crappy. For 90k they're bare bones, obviously, but low-income folks in the more expensive parts of this country have a lot worse living conditions than this, often stuck renting decrepit apartments with Section 8 vouchers.

And say what you want about mass-produced, cookie-cutter subdivisions but these places helped build the middle class in this country in the era post WWII.
 
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#14
I don't think those houses in Houston look that crappy. For 90k they're bare bones, obviously, but low-income folks in the more expensive parts of this country have a lot worse living conditions than this, often stuck renting decrepit apartments with Section 8 vouchers.

And say what you want about mass-produced, cookie-cutter subdivisions but these places helped build the middle class in this country in the era post WWII.
The homes are definitely a solution to Section 8 housing, I am just concerned that the upkeep of these low-quality homes will outstrip any savings that a low mortgage payment has. The bar for housing construction today is set a lot lower than the cookie-cutter houses of post WWII. Also, there is no excuse for no sidewalks, but that again is more a symptom of the lack of zoning than the quality of the homebuilders.
 

mendelman

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#15
I agree that there is certainly a fair amount of survivor bias in this 'perception', but there may be a fair amount of truth as well. When I see houses built after say 1980 or 1990, they just seem 'thinner', 'flatter' and flimsier than comparable size and price bracket houses of earlier periods.

We'll see though. Modern houses may be more energy efficient, but they may not 'breathe' well (as mskis describes). When such places get 'wet' mold can run rampant.

Plus, many firemen understand the inherent instability of gusset plate constructed roof truss systems - aka they burn through much quicker.

Moderator note:
I moved this thread out of the FAC since it's a great topic/discussion and needs to be in the "professional" subforums.
 

Dan

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#16
Around here, it's a different story. Small-ish town, somewhat affluent, growing but physically isolated from any major metro, a shortage of skilled tradespeople, and no economies of scale. The builders here are all mom-and-pops, and many pitch themselves as "artisans" or "craftsmen", only building uber-green and/or with very traditional methods, like post-and-beam timber framing. There's very little spec housing; it's too much risk for a smaller builder. The cost of construction here is twice the national average - about $175-$225/square foot. Market forces being what they are, the high cost of site-built construction has driven up the cost of modulars. Even without a lot, the per-square-foot cost of a modular is higher than site-built houses in communities 40 or 50 miles away. It doesn't help that there's a mismatch of zoning with the market, or that homebuyers here often have a preference for more "rustic" accommodations.

Those "bare bones" 90K houses in Houston? There's a modular townhouse project being built on the edge of town. A bare-bones unit, builder-grade everything, no options, no basement,1400 square feet ....



The starter homes I saw being built outside of the Austin suburb where I once worked were better designed, better built, and better optioned than similarly sized vinyl-sided modulars here that sell for 1.5X to 2X the price, without a lot.

There's a huge missing middle here, between the high-end and "artisan" custom builders, and the basic doublewide-style modulars coming from across the Pennsylvania state line. I wish we had the "problems" of production homebuilders and spec housing.
 

Cardinal

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#17
Quality comes down to a combination of materials, craftsmanship, and engineering. My late 1800's farmhouse had a rubble stone foundation that let the home shift. Basically a U shape, with both ells leaning in different directions. On the other hand the whole house was sheathed in 2/3 inch planks that held it together, even when the dumbass farmer decided to cut in windows and not bother with a header. My 1976 home has a block foundation which is better, and the home is still square. It is sheathed in low density fiberboard covered in aluminum and cedar, though. Still, it was constructed with dimensional lumber that provides tall cathedral ceilings and will allow me to move a wall in the loft to gain another 10 square feet in the upper bath. The builder took some shortcuts on the finishes. But that issue was even more pronounced in my almost new home in Colorado, where they eliminated as much interior trip as possible, put in textured drywall (less work than finishing it smooth) and sprayed everything.
 

kjel

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#18
Around here, it's a different story. Small-ish town, somewhat affluent, growing but physically isolated from any major metro, a shortage of skilled tradespeople, and no economies of scale. The builders here are all mom-and-pops, and many pitch themselves as "artisans" or "craftsmen", only building uber-green and/or with very traditional methods, like post-and-beam timber framing. There's very little spec housing; it's too much risk for a smaller builder. The cost of construction here is twice the national average - about $175-$225/square foot. Market forces being what they are, the high cost of site-built construction has driven up the cost of modulars. Even without a lot, the per-square-foot cost of a modular is higher than site-built houses in communities 40 or 50 miles away. It doesn't help that there's a mismatch of zoning with the market, or that homebuyers here often have a preference for more "rustic" accommodations.

Those "bare bones" 90K houses in Houston? There's a modular townhouse project being built on the edge of town. A bare-bones unit, builder-grade everything, no options, no basement,1400 square feet ....



The starter homes I saw being built outside of the Austin suburb where I once worked were better designed, better built, and better optioned than similarly sized vinyl-sided modulars here that sell for 1.5X to 2X the price, without a lot.

There's a huge missing middle here, between the high-end and "artisan" custom builders, and the basic doublewide-style modulars coming from across the Pennsylvania state line. I wish we had the "problems" of production homebuilders and spec housing.
Similar issues here. That project reminds me of one being built in Jersey City in a still marginal neighborhood. Some of them are affordable but others are market rate-going out for anywhere between $205K and $300K http://www.jacksongreenhomes.com/how-to-own/. I've been to another project of there in Neptune, NJ and we pondered buying one but decided against it after touring it. Frankly, I think I build better homes.
 
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#19
I thought I should post this here, a report from a media outlet out of Jacksonville, FL called "New Home Nightmares".

http://www.firstcoastnews.com/story/news/local/consumer/on-your-side/2015/05/12/new-home-nightmares/27204459/


JACKSONVILLE, Fla. -- It's clear from the outside that something is very wrong with Carol Ecos' house. Black lines outline cracked stucco, plastic sheeting encases window frames.

Inside, it's not much better. The smell of mold is strong enough that Ecos' dog sitter wears a mask when he visits. The roof is so poorly attached, an engineering report found it could rip off in as little as a 67 mile per hour wind. Ecos' insurance company even refused to insure her house in a hurricane.

So how does a home like this pass inspection?

We asked Tom Goldsbury, chief of the city's Building Inspection Division. He signed the home's certificate of occupancy, which signifies a house has passed all inspections and is safe to occupy. But he says the seven inspections the house underwent are no guarantee of quality. "[Inspectors] are not performing quality control," he says. They are doing a snapshot in time: As of that day, on that 5 minutes, half hour, one hour time they're at that site, whatever they see and whatever they're there to inspect is up to code."

In fact, city inspectors didn't even conduct the inspections that Goldsbury codified when he signed the home's certificate of occupancy. Taylor Morrison hired its own private inspectors for the roughly 400 homes it built in Bartram Springs, as state law allows.
What is the point of even having a Building Dept. with this kind of nonsense going on?:-o
 

The One

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#20
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