Wednesday, December 02, 2009

The Case For Affordable Housing & A National Energy Standard

Certain items are needed for all people to live a decent, modern life: decent housing, decent & safe food, clear, safe water & air; fair wage/job; access to health care. All other things are possible for a people from there.

Making a (high-end designer) commodity of any of the aforementioned, makes those items inaccessible by lower income people and the poor. And from the financial crisis of the 2007-2009 era, wee see it also can make these items inaccessible to even the middle-class in America.

Behind affordable health care, real wages and affordable housing are the largest problems facing our nation. When jobs are harder to get, it makes it that much harder to maintain one's health, and to maintain a decent place to live.  Basic, decent housing, healthcare and food are a human right.  They should not be so commoditized (and unregulated) such that it places people of limited means on path to certain death.

As a practicing licensed architect, I have seen how the mortgage/banking, real estate and construction industries have artificially hicked up the cost of housing for no reason other than personal and corporate profit borne of greed.

Architects have wanted to build green for decades (and some of us have built green), in spite of obstacles.  And we did it  before it was called "green".  Thirty
 years ago, we just called it "Best Practices in Design".  Building efficiently with the intent not to adversely impact our clients' budget (on the lifecycle maintenance costs ) was the responsible, adult thing to do. Oh, and by the way, it was good for the environment, good for the economy and the local community. It has been the construction & development industries that have lobbied for weaker energy & building standards much in the way the Big 3 Detroit Car manufacturers lobbied against fuel efficiency standards.   What was great for GM was not always what was great for America.

(See NY Times: <> )

Right now, taxes, realtors' compensation, contractor's pay, property assessors pay,  mortgage company profits are ALL based on the so-called assessed value of a property.
EVERYONE in the aforementioned interest groups HAS A BUILT IN INCENTIVE to artificially push the cost/selling price higher for a home.

Cities get more in tax revenue if homes are valued higher. (So legislators want high-end homes built in their districts.) Realtors, bankers, contractors make more profit if the house is valued higher (because they make more money the higher the retail home selling price.) Home owners have an asset they can leverage for more credit if their house is valued for more --providing they have equity in the house, etc.  Home Owners are induced into pretending to be more affluent than they are, so many get trapped into an unmanageable debt load. (Is your mortgage upside down?)

There is a disincentive in our current regulations/laws toward making housing affordable, and that has contributed largely to our current housing crisis.

Merely making credit (or loans) available to people who can't afford $400-900K homes doesn't solve the housing problem, when people only make $7-20/hour at WalMart (and then also have to pay for their own health care.) 

The supply of affordable, sub $175K homes is shrinking FAST and still out of reach for many WORKING Americans. Rents that are over $1000 per month are unaffordable for major portions of working Americans -- let alone the unemployed and underemployed. (See 
Barbara Ehrenreich's  work  <> )

As an architect, I can say with some righteous certainty, I have had people come to me with stories of greedy Developer/Builders who build a 2400 SF vinyl clad energy-inefficient home for about $160K, then turn around and collude with realtors and bankers, mortgage companies to sell the very home for $600-800K.

There is nothing wrong with a $800K energy efficient house sold to someone who can afford it. I know what a house costs to build, and it's not $500K for a vinyl clad, vinyl window house with forced air heating, laminate floors and cheap ceramic tile and budget American made, entry-level appliances. Granite counters & stainless steel appliances do not add $200-400K to the cost of a house. The public has been bamboozled by ill-intending developers, builders/ contractors, mortgage brokers and realtors.

THE PROBLEM WITH SELLING A $160K HOUSE for $500-800K is THAT IT STILL PERFORMS LIKE A $160K HOUSE -- and THAT IS WHY IT LOST ITS VALUE BETWEEN 2008 - 2009. People should make a profit on their work, but a 300% premium on housing IS NOT SUSTAINABLE. We have our current national economic condition as proof.

The homes that are really sold at what they are truly worth, HAVE NOT lost their value by 25-30%  --not even in this [2007-2010] market.
We also need a more National (uniform) Building Code and set of standards, so that pre-fab housing and valuation across the US becomes more uniform (in quality and price), level and fair (i.e. affordable. Although some allowances in the codes must be made for climatic and geological differences, i.e. earthquake safety, climate differences, etc.) This means, houses need to be built better, more energy efficient and costs can be controlled better because regional variables are reduced.
If structures were built to a more National Standard, then a $200K house in St. Louis would be worth about the same as a $200K house in Oregon-- and would not have a wild $200-400K cost difference for the same size, materials and features as is currently the case in real estate pricing in the U.S.A.

I recently attended a conference of one of the regional carpenters' unions in my area, and one of the presenters ADMITTED that Contractors try to ENcourage stick building (i.e. wood frame) over pre-fab because Contractors make more money on stick-built structures. Consumers, what more proof (of price fixing) do you need?

Standardizing building and zoning laws would go a LONG WAY to standardizing and leveling out fabrication/construction costs. If health care was affordable for all Americans, the operating COSTs to businesses would also decrease costs to manufacture and build good products-- including affordable houses.

We have to make changes to how we value, build and design structures across the entire country.
Putting the product decision process (and minimum legal standards) in the hands of the industries that artificially hiked-up the prices in the first place, will never make us a sustainable nation.

"No problem can be solved from the same Consciousness that Created It" -- Albert Einstein

Institutions and laws have to change. We have to de-incintivize the greed factor that lead us to building inefficient, low quality structures, sold to people who couldn't afford an over-priced home. It's the right thing to do, the American thing to do.

Pass this info on.


For more discussion on these issues,  see:

- You Paid Too Much For Your House: Building Costs vs Retail Price Paid

- Builders, Contractors Fight Against Adoption of U.S. Energy Codes (Sounds familiar? Contractors are fighting energy efficiency the way Detroit fought against more fuel efficient cars. What did that get us?)
<> and <>
- How Conspicuous Consumption is Killing the US Economy  -- and screwing most property Owners in Return.

- Housing Valuation as a Social Construct:  Or How the Rich 1% Build Fake wealth on paper and screw working class people + people of color in the process.  #OWS

- The Lack of Diversity in Architecture

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