Lack Of Starter Homes In Michigan

[emu steve]

They won't do so, because they can't make money on such structures.

You cannot make money on a new construction 1,100 sq. ft. ranch in Warren these days. The construction costs are higher than the sales costs.



What "affordable housing crisis"? The U.S. probably has the cheapest housing in the developed world relative to incomes.

https://www.forbes.com/sites/forbesr.../#498bf5e13228

https://www.washingtonpost.com/local...=.bd50d0b5819e

https://www.nytimes.com/2018/02/02/o...ng-crisis.html

https://www.finance.senate.gov/heari...-and-solutions

I won't bore the reader with dozens, hundreds, or thousands of other such articles, but this paragraph from the NYT article is a good synopsis:

"For example, a 2017 report from Harvard’s Joint Center for Housing Studies shows that about 11 million families — or about a quarter of all renters in the United States — spend more than half of their incomes on housing. These families often have to choose between making rent and paying for essentials like food, child care and health care, and many are just one financial emergency away from eviction."

B'ham is on a different page than most of America, I think.

I'm going off on a slight tangent, but housing costs and health care costs [[including medical insurance) are the biggest threats to an individual or family's financial security.

To the extent that the public and private sectors can help reign in these costs then Americans will sleep better at night...

[Bham1982]

B'ham is on a different page than most of America, I think.

EMU, you're just posting random articles about some people having trouble affording housing [[which will be true in any capitalist society regardless).

Again, there's a ton of data on housing burden, and the U.S. is generally regarded as having the cheapest housing in the first world. Incomes in the U.S. are higher than basically anywhere, and apples-to-apples housing costs are basically lower.

In, say, Germany, typical household l incomes hover around 30k and typical single family homes hover around 400k. Oh, and there are basically no mortgages, or mortgage deductions, and you typically buy homes in cash, which is why almost all non-wealthy either rent or inherit their homes.

Or, locally, you can cross over to Canada and the apples-to-apples incomes will be lower, and a 300k home in Oakland County is an 800k home outside Toronto [[and much smaller lot).

Michigan housing costs are cheap, and neighboring states [[Ohio, Indiana) even cheaper. Unless you're buying in a few pricier enclaves [[Bham-Bloomfield-Franklin, Northville, Ann Arbor), you're not spending a lot of money relative to the rest of the developed world.

Also, if you want cheaper homes, you need to decrease land costs, meaning you would have to loosen land use regulations even further, and allow even more sprawl. I doubt this would be a big hit here at DYes. High[[er) home prices are almost entirely a function of land values. It doesn't cost more to build the same house in Bham as in Taylor.

[ndavies]

Unfortunately Bham is correct.

Currently it costs between $150 and $170 a square foot to build a single family house in Southeast Michigan. With a smaller house coming in closer to the $170 range. So you say that's not bad. 1000SqFt x $170 = $170,000. Unfortunately this doesn't include land, basement or garage. Add the cost for a lot, the garage and the basement. Suddenly that small house isn't so cheap.

Why does a small house cost more per square than a big house? quite a few things are fixed priced. Many things, like sewer, water and utility hookups, cost the same for a small house as a big house. So fewer square feet divided into the fixed costs means a higher price per square foot.

How do I know? I'm currently trying to have a new home built. It's a modest 1500SqFt single family house with basement and garage. I'm going back and forth with the Architect and GC trying to bring down the cost of the house.

[emu steve]

Unfortunately Bham is correct.

Currently it costs between $150 and $170 a square foot to build a single family house in Southeast Michigan. With a smaller house coming in closer to the $170 range. So you say that's not bad. 1000SqFt x $170 = $170,000. Unfortunately this doesn't include land, basement or garage. Add the cost for a lot, the garage and the basement. Suddenly that small house isn't so cheap.

Why does a small house cost more per square than a big house? quite a few things are fixed priced. Many things, like sewer, water and utility hookups, cost the same for a small house as a big house. So fewer square feet divided into the fixed costs means a higher price per square foot.

How do I know? I'm currently trying to have a new home built. It's a modest 1500SqFt single family house with basement and garage. I'm going back and forth with the Architect and GC trying to bring down the cost of the house.

Understood.

I live in NoVa where new houses going up are usually around 700/800K.

What you say is legit, but you are talking about a 300K house, not something going for 700K.

Now I realize that land in D.C. is more expensive but they are not building 1,500 sq. feet houses and that is the argument.

You are building a starter house. The 800K house I describe isn't a starter and matter of fact the only way to get a new starter house is to have it built for you.

[ABetterDetroit]

Understood.

I live in NoVa where new houses going up are usually around 700/800K.

What you say is legit, but you are talking about a 300K house, not something going for 700K.

Now I realize that land in D.C. is more expensive but they are not building 1,500 sq. feet houses and that is the argument.

You are building a starter house. The 800K house I describe isn't a starter and matter of fact the only way to get a new starter house is to have it built for you.

Virginia you say where new construction is off the chart?

Where their economy is diversifying rapidly with new construction, businesses, jobs and housing that are just going gangbusters and the most expensive property tax rate in the whole damn state is 20% of what Detroit’s happen to be and are still lower than anywhere in Michigan that has electricity?

Go figure.

Now back to your regularly scheduled programming about how awesome metro Detroit’s economy is chugging along because they are building a whole 500 new expensive houses on the very outside ring of the sprawl in farm fields.. [[which only by sheer coincidence is where the property tax rates are the lowest anywhere in metro Detroit)

https://www.investopedia.com/walkthr...rty-tax-guide/

[oladub]

How exactly is the labor shortage "temporary?" Just where are all these new workers going to come from to end the shortage?

Even with low unemployment, wage growth has been lackluster. We're only just now seeing any significant wage growth [[2.9%) and even then that's only significant compared to the Great Recession years. It's actually pretty mediocre if you compare it to the years immediately preceding the Great Recession, where wage growth would commonly exceed 3% annually even with higher unemployment rates.

https://www.frbatlanta.org/chcs/wage...r.aspx?panel=1

It's even more mediocre if you take into consideration that real wage growth is just BARELY outpacing the Consumer Price Index.

https://seekingalpha.com/article/416...e-2_36-percent

So basically, Americans are making 2.9% more in wages compared to last year, but the price of the stuff we buy went up 2.4% during the same time period.

And one more thing, the rise in wages was due at least in part to the fact that 18 states increased their minimum wage starting in 2018, so it's not entirely dependent on mere supply-and-demand for labor.

Regarding your response to my comment "A temporary shortage of labor incentivizes more job training, boosts wages because of supply and demand, and helps prevent the economy from overheating. Some working Americans are finally gaining a larger share of the economic pie."

Growing up in a Detroit family in which all bills were paid by union carpenter wages and house builder profits of lack thereof for two generation, and having done some construction work myself, I'm aware of ups and downs in Detroit area construction. In recession years, unemployment among union construction workers was in double digits. We are temporarily at near record employment levels.

It's true that wages haven't kept up. That is by design. My comment you responded was in response to post #21 about a "massive shortage of skilled tradesmen" brought about by anti-immigrant idiocy". However, policies encouraging millions of cheaper foreign workers to flood the job market to remedy a temporary labor shortage kills unions, suppresses American workers' wages, burdens taxpayers in the long run while increasing corporate profits and economic inequality. Adam had brilliant responses on this thread [[post # 63,67,69). From a builder's point of view, he said there was "no labor shortage but a pay shortage".

Best comment on this thread- "What "affordable housing crisis"? The U.S. probably has the cheapest housing in the developed world relative to incomes." -Bham post #75

[Bham1982]

It's true that wages haven't kept up. That is by design. My comment you responded was in response to post #21 about a "massive shortage of skilled tradesmen" brought about by anti-immigrant idiocy". However, policies encouraging millions of cheaper foreign workers to flood the job market to remedy a temporary labor shortage kills unions, suppresses American workers' wages, burdens taxpayers in the long run while increasing corporate profits and economic inequality.

Just to be clear, none of this is true. It's all anti-immigrant rhetoric, with no factual underpinnings.

First, there is no immigration wave "flooding the job market". The U.S. actually has the lowest rate of immigration of its direct competitors [[Canada, Australia, and the major Western European countries all have higher, sometimes much higher, rates of immigration).

Second, there's zero evidence that immigrants "kill unions, supress wages or burden taxpayers". In fact the opposite is true. Immigrants are more heavily unionized than native-born, wage gains are higher in metro areas with the highest immigrant counts, and immigrants are a huge net gain for public coffers, as they produce far more than they consume.

It's no coincidence that CA just replaced the UK as the world's fifth largest economy. You can thank immigrants. Apple, Amazon, Facebook and Google were all started by first or second-generation immigrants. The U.S. is the wealthiest place on earth because of immigrants, mostly.

[emu steve]

For the sake of argument I will assume this statement is true:

Best comment on this thread- "What "affordable housing crisis"? The U.S. probably has the cheapest housing in the developed world relative to incomes." -Bham post #75

I will make this statement which I assume most agree is true:

U.S. has the highest per capita spending for health care.

I assume most can guess where I'm going:

Cost of living is a 'market basket' of things like housing, transporation, health care, food, etc.

So I no longer feel as good about B'ham's post if I pay 'too little' for housing after [[my post) about paying 'too much' for health care.

Someone might have seen their taxes cut say $15 per week but the family gasoline bill go up $10 per week. Are they feeling really good? Probably not.

Now if B'ham comes back and says, "U.S. doesn't have an affordable housing crisis, but it is really other things [[e.g., health care, higher education, etc.) then I would be more agreeable.

[oladub]

Just to be clear, none of this is true. It's all anti-immigrant rhetoric, with no factual underpinnings.

First, there is no immigration wave "flooding the job market". The U.S. actually has the lowest rate of immigration of its direct competitors [[Canada, Australia, and the major Western European countries all have higher, sometimes much higher, rates of immigration).

Second, there's zero evidence that immigrants "kill unions, supress wages or burden taxpayers". In fact the opposite is true. Immigrants are more heavily unionized than native-born, wage gains are higher in metro areas with the highest immigrant counts, and immigrants are a huge net gain for public coffers, as they produce far more than they consume.

It's no coincidence that CA just replaced the UK as the world's fifth largest economy. You can thank immigrants. Apple, Amazon, Facebook and Google were all started by first or second-generation immigrants. The U.S. is the wealthiest place on earth because of immigrants, mostly.

"There's zero evidence that immigrants "kill unions, supress wages or burden taxpayers" Really? Look around you. You are essentially denying supply and demand. Why do corporations send their jobs abroad if not to profit from cheaper foreign labor? Meat processing jobs used to be union jobs in small town America. Those American workers have been replaced by non-union legal and other immigrants. How about roofers? 15% of construction workers are already illegal non-citizens. Those used to be good paying jobs. My first paycheck job was with the Santora Landscaping Company in Detroit. The workers were mostly high school students and my foreman was a-hole redneck. Looking at landscape crews today, I don't see so many high school students saving money for college and getting working experience. You are in denial. Please don't compare the U.S. labor market with what Merkel did to Germany.

California owes much of its fortune to being the nexus of Asian imports. Most Californians don't work for Silicon Valley computer businesses which hire highly educated legal visa holders. Meanwhile, the the moving vans are moving record numbers of escaping middle class Californians to lower taxed, lower housing cost havens. But this thread is about affordable housing which involves construction worker wages rather than internet companies.
Immigrants flooded California construction. Worker pay sank. Here’s why -LATimes

I unrepentantly prioritize U.S. workers over the the interests of foreign workers or their profiting and often cheating employers. We have that difference.