Affordable Housing: Died of a Theory

So said Jefferson Davis, of the Confederacy, not affordable housing.

In short

Avg home cost is $225,000

Avg income is $50,000

Ancient rule of thumb says you should only spend 1/3 your income on housing - including taxes, maint., insurance, and utiliities.   If you are shocked by this, you must be under 40.  This rule worked for about 100 years until abandoned in the RE run up that has caused this great recession,

Therefore, the avg. American worker should only buy at most,  a $150,000 home!

Which means the average American worker will be renting forever.

Wait, you say there are parts of America with cheaper housing.  If so, you're in the middle of no where, and most of the time, that means low pay area, so you won't probably be making $50,000 a year.  I know.  I'm from a depressed area, for the last 100 yrs, and 50G is a really good salary there.

Two solutions:

Boot - Strapping

Modulazation or Buy Now, Build Later

Note:  Ashamed to admit, didn't realize rock wool was competitive with foam insulation, and shocked that it's carbon footprint is about 3 x less than foam.  Apparently it takes a ton of energy to turn petro chemicals into foam insulation.  That opens up a whole new range of pre-fab panels easily assembled from common materials, meaning mass market, meaning competitive and widly available.  I'll sketch it up when I finish my next project. 

Grow Your Own Home II

Yes, this much like the Growing A Home idea.  The difference is the ability to DIY over time.  Growing A Home really needs a contractor to bang out the additions / renovations in a timely manner.  Living for a couple of years in a construction zone is not fun, and not safe.  Also, if your work stops when some part isn't weatherized, you risk your investment in time and money, and your health if mold sets in. 

Growing a home is a great idea, buy small, save your bucks, buy your additions and renovations.  If you can't afford that even, and MOST people actually can't anymore.  This is the alternative, distributed sweat equity, distributed over time.

No time - No Money -- No problem

We all have day jobs, lots have night jobs, the wife works, the kids will be working soon too (just look at England, 27% of workers now part time, and mom, pop, and one or more kids work in each household - or some combo of those stats, frightening no matter how you look at it.).  Do you have just one day a week you could devote to the effort?  Even an hour or two a day would do.  You would slowly but surely build up a stock of building panels that could be slapped up to form a shell in a day or two.

Can't save up enough money to buy an addition?  You might well be able to buy a trickle of needed supplies, and might well be able to 'buy on sale', or buy salvaged materials - which are available eposodically.

NO MONEY -  Well, very little money, you'll always need to buy something.   Try asking at job sites.  If you haul away their partially used studs, plywoord, etc, the GC saves money, haul away enough and they might buy you a beer.  You can try your local salvage center / disposal site, etc. too.  If you see a building being demolished, stop, ask.  If you see a building that should be demolished, ask the owner if you can do it for free, my guess is anyone holding a building in that shape would relish a free demo.

Materials:  1/2 inch plywood, 2 x 4's, ice and water shield, shingles, drills, bits, lots of bits, screws, lots of screws, and I prefer molly bolts, but any bolt would work if done right, some prefab windows and doors, some wiremold product for the power, some mini sinks, toilets, lavs and showers.  Ta da!

Learn on the job

Does the thought of building a house scare the crap out.  Odds are it should.  Modular building components can be built "off line", off site, in off time, in a garage, a shed, a tent, and you can make those mistakes and not risk your investment in time and money.  You just take it apart and put it back together until it works.  Wow!  That takes the pressure of not having the shower working Monday morning off your shoulders. 

Modular also lets the family, friends, anyone help out.  It's ad hoc, distributed over time, and non - linear.  Delays in "production" from one person has no effect really.  You won't be waiting for Fred to finally show up so you can close the roof before it rains.  Well, true some work especially in site assembly will need help, and run those annoying risks, but they'll be far, far fewer, and the consequences far, far less, and the stress, far, far less, ahhhhhhhhhhh, that feels better just thinking about less stress.

Hard to believe.  Any job can be broken down into tasks, and simple to follow direction written.  Then, there's the internet and U-Tube, which between them have hundreds of videos of every element in construction for you to learn and follow.  More than enough to help you.

Lets go into the future, that future that never seems to get here, but, someday, it will, in that future, where virtual reality glasses could display schematics of the entire task, for you to follow, litterally lifting 2 x 4's and pieces of plumbing to match the video, pausing while you look for that size screw, and then rolling on.  It's just too simple.  The same tech could video everything for building officials to spot check to ensure you're building to code.  It's really that simple. 

I don't need no stinkin' banker!

Ahhhh, the conspriacy theory, at last........

If you DIY, modularly, over time, while saving to buy a small starter place to tack onto, you end up spending your hard earned money ONLY on assests you will own, that will increase in value, while giving you a better life.  Heh, that sounds too good to be true, why don't we do it this way?

Well..............

Once upon a time the lord of the manor might let you stay in one of his homes, sit on one of his chairs, eat some of the food from his land, if you slaved away for him 18 x 7, with a couple of hours off for church.

Then after hundreds of years of revolution, political and industrial, the dream of home ownership, being the master of your own castle came true.  Sears sold homes from a book no less!  Many a time you'd even save the money up and just buy the land, buy the house, buy the kit from Sears.

Everyone was happy, except for a few, and one has to wonder, if they didn't bide their time and work to reverse all the good that had been done for the masses.

Because.................

In just 60 years, we've gone from the dream of home ownership, to a townhouse, to condo, to a two bedroom, to a studio we can throw up a wall for jr's bedroom, to it's just impossible.  Yet, notice that we all live somewhere, can find someplace to rent for 1/4 to 1/3 our gross pay, what used to be called acceptable only for "home ownership" costs.  $1,200 for a house in depressed rurual America is a joke, but not as funny as $2,500 and up for the mortgage, taxes and insurance if you want your own.  In a city, $1,200 might be the rent on your 2 or 3 bedroom apt, plus more for your parking space, and more for your storage room. 

What happened??????  Well, for one, look at the profit margin on real estate.  Double digit?  Yeah, high double digit is the goal, and I see many an empty unit waiting for a recovery so those goals can be met.  Then there is the total lack of factory fabricated housing, why, factories build so much else.  Hard to believe we've never had Henry Ford or Michael Dell of housing.  Endless challanges to multiple dwelling housing by 'well meaning' communities (where do they get the money to hire the attorneys to block so many projects?).  Endless campaigns to end "boarding houses".  Yes, even those kindly old widows can't let rooms to a few struggling souls without risking the wrath of the city marshal (Boston, the last city with a major boarding house industry, is currently winding up it's crack down), SRO's - which isn't necessarily a four letter word, and any other inexpensive housing alternatives.  It's a full apartment or house or nothing for everyone now.  With no alternatives, we have no recourse but to pony up whatever the manipulated market demands.

The reality is real estate is a huge profitable industry to some very well to do and connected people, and of course, to the banks.  Much like GM quietly donating money to both political parties to cover their bets, rest assured the money men quietly support every effort to ensure housing remains high and increases, even while bemoaning the increasing costs.  Yet, notice, few real estate investors abadon the industry, shouldn't they if costs are "out of control".  They are perfectly in control, just not the peoples control.

When you use a 30 year mortgage to buy a home, co-op, condo, etc. you will end up paying twice, or three times even.  Just imagine how much money that is, and how the masters of the universe salivate over the thought, and will do anything to keep it coming, and make it bigger.  This is America in the 21st century, where money talks and morals are passe'.

Of course, maybe we the people should be able to afford to save and buy a home in less than a life time, if the distribution of wealth hadn't slid so far to the top few percent of the population, but that's another rant.

Emergency Housing -

    A Distributed App.

    or

    By the People, For the People......

This began in my mind as an Emergency Housing response after Katrina.  Those horribly small, VOC heavy, storm adverse trailers, that would be thrown away after a couple of years made me sick.  There were also hundreds of thousands who wanted to help, but were turned away and turned off by the horribly slow, rigid, and horribly ineffective government rules on what could be done.  Most of these modules can be built by anyone, really, kids and little old ladies.  It just takes a few more and a little longer.  Donated materials would be more accessible since it's cheap and easily available.  It can be loaded in a panel truck, unloaded, bolted down, before any "officials" could make up rules to stop you.  Once the folks who lost their home are in, even the hide bound beaurocrats would have to relent and go elsewhere to peddle their paperwork.  Especially if you bring along some cameras and offer to video tape the officials antics for the news, or U-Tube

What's the problem, lots of people have always rented you say.  That was often a CHOICE.  Now it's no longer a choice. 

Again you say, well what's the problem, more people need to rent, the RE industry will just build more apartments, and the rental prices will drop.  Really, have you actually gone rental shopping?????  Try it, really, until you do, you are working on suppositions, on "what you believe" not on facts.  You try finding a two bedroom rental in a city for under $1,200, good luck, then try to find one you'd want your family living in.

Also, look at the quality of rental housing being built, it goes down every year.  I've seen, and built, 'kitchens' that are 8 x 8, inlcuding the cabinets and appliances.  That used to be a galley, on a very small sailing ship.  In NYC, heart of bleeding heart country, the legal size of bedrooms has been reduced to 7 feet min (used to be 9), or to that of many a  prison cell, put in bunk beds, and you're kids might as well be doing 10 - 15.   Now tell me the free market will create affordable and livable rental housing.

Much like diamonds and caviar, owning will be limited to the top tier of wage earners.

I hear you, so what, the rich still have to pay.  They only have to pay, until it's paid for.  After that, the rich get richer, while you continue to pay rent, 30 yrs, 40, 50, how long will you live, at 80 you'll have rented for about 60 years.  The rich, who could buy, paid off after 30 years, and pocketed the rest the next 30.  Just another way the gulf between rich and poor grows.

The speed of change, or the price of change

Get married in your 20's, but a house, pay it off before you're 60, was the American dream.

It provided stability personally, for the community and culture.

I allowed retirees to live much less expensively.

It is what is in the back of everyone's head when they think of home ownership, that it'll be paid off and they can retire in it, or sell it and reap all the procedes in profit, buy a retirement condo, whatever.

People seem to ignore the essential element in this scenario - buy in your 20's and stay put.

The average time an American stays in one home / apt is less than a decade.

If you are buying and selling, tradiing up, etc., you are never managing to even pay off much of the principal, as the first 10 yrs are mostly interest.  You are treading water economicially, unless you are lucky enought to buy at the bottom and sell at the top (and of course, then somehow find somewhere to live until you can buy at the bottom again).

This dovetails with the mantra in America to move, move, move, move, to where it's better, where the jobs are hot, where that good job is.  Every move is step away from any eventual independence from mortgage or rental costs.  Could you win this shell game by making more and more and more money until housing costs don't matter, sure you could, you could join that top 10% of Americans to whom money is always there.  Odds are better than lotto, but lets face it, since most in the top 10% were born there, look it up, you don't have a 10% chance.  You have a much better chance to enrich many a business with your extreme efforts to look good, and many a landlord or broker and bank as you move and move and move again.  The speed of change might help business, but it rarely helps a worker.

What is the effect of both the above scenarios

Retirees that can't afford to live anywhere.

They then fall into gov't funded nursing homes, or apts., which always cost far, far more than staying in their homes.  Where does the money come from to pay the nursing homes and gov't sponsored apts, that would be taxes, from the workers, who then have even less to spend on their housing, which means, even more fall into the perpetual rental cycle.

The gov't is / has sat on hundreds of thousands of abamdpmed homes, bought with tax payer money, until they are in such deplorable condition only a developer, who will pick the wrecks up for nothing, to fix them up and flip them.  Why weren't these sold at fire sale prices to people who were still employed at the same fire sale prices those developers will be getting? 

The current gov't plan is to find developers to buy huge blocks of these houses and RENT THEM to people needing housing.  The gov't is actually encouraging  housing taxpayers overpaid for (the gov't got them as "collaterol" for the bail out loans) only be sold to and used by big RE corporations to endlessly milk tax paying working class forever.  Now you tell me the RE industry didn't whisper that one into the gov't ear.

One problem is the houses are still in too good a condition, they'd cost the RE corps too much, so no takers.... yet.  When they've deteriorated enough, been vandalized, have roofs blown off, window ripped out, they'll pounce, slap some paint over the rotten wood and moldy drywall, and rent, at what I think $1,500 a month (without utilities)  is about average to rent a house in America now.