Starter Home Barriers
As a way to track my thoughts and findings on Affordable Housing, I plan to continue posts here under the tags of “Affordable Housing” and “Sand Hill Farm“. This will include my thoughts and recollections from Culver’s Affordable Housing Task Force meetings. That way anyone interested in my take can follow along.
In that vein, I just read an article in Builder magazine titled: “Are New Starter Homes History?” I found some interesting take-aways from the article. Two of the biggest are that they consider a home under $200,000 a starter home and that the general rule for starter homes is 2.5 time median household income, which according to our last Affordable Housing Task Force meeting puts a starter home in Culver at $113,000. That’s not happening by any stretch of the imagination without serious subsidizing. Here are some other take-aways from the article:
- Making a $200,000 home work is Junior-high-level math. Solving for 20% profit – Land and building direct costs cannot exceed $160,000.
- The lowest build cost is around $50 a foot. To be competitive with existing stock, you need a 2000 sf home which gives you $100,000 for bricks and sticks and $60,000 for the lot. (That is a price for a developed lot with all the infrastructure, e.g., water, sewer, storm, streets, sidewalks, street lights, etc.)
- Metrostudy guidelines say estimated price per bulk lots has gone up from around $50,000 in the recession to over $80.000.
- Even if land can be secured at a reasonable cost, cash-thirsty localities heap fees upon fees that weigh more and more heavily on the final home price.
Residential material costs have risen 45% in the last decade.- One way to reduce per lot land costs is to increase density.
- Value engineering can bring down costs at the expense of amenities, i.e. build a no frills box.
- One question is does today’s starter-home buyer – a millennial adult more often than not – want to move into a boxy, no-frills home with Formica and vinyl after living in high-tech student housing and ritzy apartments. The expectation of what a customer thinks an entry level house is can be crazy. They want granite countertops, tile backsplash and stainless steel appliances.
- There are political ramifications to introducing lower-income citizens into established communities. Entry-level buyers new to the neighborhood take the not-in-my-backyard hit.
A lot of these are tainted by location. The commentary about millennials as the target may not be the same here, but when we target starting teachers, we may run into that mindset. Some of the expectations for the subsidized housing that Culver Academies provides gives credence to this mindset.
Home Image Source: Duane Sala Construction
Ground Water Monitoring Survey
The Indiana Department of Environmental Management (IDEM) is conducting a Statewide Ground Water Monitoring Survey. Participation is free and if you are selected for the survey you will receive a copy of the report.
Most of the residences on Lake Maxinkuckee and throughout Marshall County are on wells. The age of the Lake Maxinkuckee wells may preclude their inclusion in the study, but it can’t hurt to ask. I’m sure there are conspiracy theories on why this might not be information you want to share, but in my estimation, most people don’t test their wells as often as they should. This is an opportunity to possibly have the test done for free. Don’t you want to know if there is something bad in your drinking water?
Here’s a link to the study site with a description of who would be eligible and an application for inclusion in the survey. The study is statewide, so it should give an interesting picture of our ground water resources. I signed up for my home which backs up to a golf course. I had the well tested when I moved in, but have only followed up on that once since that time. My bad! This is an opportunity to bring some tax dollars home!
Image Source: indiana.edu
Attacking TIF’s
A friend sent me a link to this article from Inside Indiana Business. The article cites a Ball State University brief titled, “Some Economic Effects of Tax Increment Financing in Indiana“, which postulates, per the article, that the overall effect of TIF districts in a community is negligible in the creation of economic development because it is just a function of moving development from one area (outside the TIF) to another (inside the TIF) at the expense of taxpayers outside the TIF. If you’re really interested in this, I would suggest you follow the link to the full “brief” as there is a lot more information there than what has been condensed into the article.
Dr. Ronald Liechty
Rev. Dr. Ronald Liechty
Easterday Construction Co., Inc. lost another good friend last week with the passing of the Reverend Dr. Ronald Liechty. As President of Garden Court, Ron was a client through the seven Garden Court projects Easterday Construction Co., Inc. has completed. As often happens with good people, Ron also quickly became a friend. You often hear the accolade, “He’s a gentleman and a scholar.” That was Ron.
Along with our interaction on Garden Court projects I also had the opportunity to work with Ron through our mutual involvement in PIDCO, MCCF and the Community Resource Center. Among various other groups to which Ron volunteered his time, Ron set the bar very high in his examples of volunteerism, philanthropy and community leadership. I had the opportunity to attend his retirement party when he left the Presidency of Garden Court and his 80th birthday party. The number of people in attendance at both events and the uproaring of goodwill shared there was testament to how he had touched many lives in the community. Ron’s ability to lead and to find amicable resolutions will be missed. I counted Ron as a personal friend who will not be replaceable. I want to extend my personal condolences as well those of the Easterday Construction Co., Inc. family to Ron’s family. I’m sure they’re aware of how many lives he’s touched but this is just a reminder of how he touched ours.
