Building Affordable Homes is Difficult

Housing should be affordable - firemanThere are many roadblocks to building affordable homes. And by affordable, I mean that no matter what your job is, a home is something that you can afford. Whether you are a teacher, a nurse, fireman, sanitation engineer, EMT, military or working in another job serving the public, you should be able to live near where you work, in a safe area, in a home that you are proud to go home to. Unfortunately, this is getting harder and harder to do. And, it isn’t because developers and builders are greedy. It is the perfect storm.

Land prices have increased exponentially. Finding affordable land has become a treasure hunt in most metro areas as the distressed lots are gone. What people who aren’t in the industry don’t understand is that there is a direct relationship between the cost of the land and the cost of the final home. If the home site (lot) is a $100,000 lot, it isn’t going to have a $100,000 home on it. The industry standard ratio has historically been 5:1, so a $100,000 lot will most likely have a $500,000 home on it.

Lumber and steel tariffs have driven the cost of building materials up. Although the lumber tariff has eased some, at its height, lumber prices were adding about $30,000 to the average home.

Everyone needs a roof - pregnant coupleLabor is hard to find and expensive when you do find a framing crew or other necessary subcontractor. Demand is high, and so are prices for labor. The fact is, we don’t have enough trained, skilled labor in the construction industry. This is something that many different organizations, including the NAHB and HBI are working on to resolve, but it is going to take adding vo-tech back in high schools and other initiatives to find a long-term solution.

Local government and local policy has a huge impact on home prices. Industry Market Analyst John Hunt with MarketNsight says, “Regulatory burdens in the form of environmental, labor and zoning rules have increased the cost to develop over 60 percent in metro Atlanta. This greatly increases the overall price of a new home and affects affordability.”

Government regulations have impacted many builders and potential homeowners. A recently enacted school tariff in York County, South Carolina has added more than $18,000 to the price of a new home. This increase prices many entry level buyers, first responders and others working to serve our community, out of the market.

Housing should be affordable - teacherAs an industry, we need to work together with communities to overcome obstacles to affordable housing. The Home Builders Association of South Carolina is advocating for affordability and working to educate the community on how to become involved and work together on the issues at hand. As part of this educational process, the HBA of SC hired Denim Marketing to create a public relations and social media campaign targeted on awareness. Two different series of posts focus on who is affected when homes become too expensive. “Everyone needs a roof over their head” spotlights homeowners at different stages of life, including a single female buyer, young couple, retired couple and everyone in between. “Housing should be affordable” focuses on all of the people who serve the local community, from firefighters and teachers to delivery drivers and military.

Mark Nix, executive officer with the Home Builders Association of South Carolina, states, “Affordable housing needs an advocate. It is a topic that we need to educate people on. Individuals, government and communities need to be educated on the issues that have created the challenges we face.” He continues, “We are pleased to be working with Carol Morgan and the team at Denim Marketing on a new educational campaign designed to show all the different walks of life impacted by the lack of affordable housing. The visuals selected for this campaign are impactful. We hope they cause people to stop and think.”

Denim Marketing is invested in housing and real estate. If you need help with an advocacy issue, contact us. We’d love to help educate your audience about the issues facing housing.

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