Homeowner Rules

I’ve spent a lot of space in many posts here in criticism of the homebuilding industry and of the financing institutions and of their mutual cowboy risk-inherent tendencies. When homebuilding is seen as a primary economic stimulant, bad judgment and greed are confused with smart business decisions. It seems wisdom and restraint are in short supply in the times they are needed most. To paraphrase Upton Sinclair, it is difficult to get businesses to understand something when their potential growth and wealth is dependent on their not understanding it. Or put another way, when the plundering is good, the philistines among us are exposed.

But the philistines are nothing without willing victims. In truth, it is the consumers who most decide what happens with homes and homebuilding.When our consumers tell us they want bigger more than they want better,square footage goes up and construction quality goes down. When they like luxurious bathrooms, every home has a spa. When they like granite countertops, the quarries work overtime. Market trends redefine what value means on a regular basis, but it’s rare when American consumer biases are more than skin deep. The industry responds by accentuating the current superficial value trends and sacrificing what isn’t seen or appreciated. As minimal as they are, its fortunate that building codes save both consumers and the industry from truly disastrous trade offs.

If better homes are going to be built on a regular basis, the only real hope is by way of more discriminating homebuyers. As the insane bubble years spawned idiotic behavior, the recession is causing homebuyers to have a new wave of rational thinking and increasingly restrained desires.

If our 2010 clients are an indication, the current consumer trends are encouraging. These points are connected; one quality imperative leads to another and they add up to important contributions to what I call theNew House Rules:

1. A home is an investment…in your life.

In this economy, people aren’t buying or building a home to flip, so they’re buying a place to live. Decisions about their home are now calculated on what is important for their quality of life, not every whim and wish.

2. The American dream is a verb, not a noun.

It’s about working, earning and building, not getting something for nothing. Future homeowners have come to their senses and realized that the American Dream is not the right to immediately have the home of their dreams, but the right to work toward the home of their dreams. They are willing to build in several phases or put off finishes and amenities to get the home built right in the first place.

3. Build small, live large.

They want their homes to be smaller. A few years ago, the standard size seemed to be well above 3000 square feet. Now people want their home to be smaller and less expensive to support in terms of energy and maintenance costs. The average home size for our customers is dropping to 2500 square feet. The next home in our shops will be around1000 square feet.

4. Avoid using your mortgage for expensive fluff.

Our customers are interested in the quality of the building itself and are willing to compromise otherwise expensive millwork, fixtures and finishes to put more of their financial resources into durable structure and energy conservation. For the first time in my building career, I’m seeing people choose lesser quality in finishes and amenities to get more quality in structure and insulation. It’s my dream come true.

5. Mortgage your house, not your life.

Our clients are figuring out how much they can afford and they’re not willing to spend a dime more. In the boom years, it seemed that all budgets were flexible. Many clients would spend way beyond the original budgets as they made changes and upgrades through the building process. The new normal is for fixed budgets, with few, if any changes, and no upgrades. Building budgets mean something again as people are unwilling to risk the possibility their income won’t easily cover the mortgage payments.

6. Invest in what you need, pay for what you want.

Some of our customers are simply putting off the installation of fixtures and finishes until they can pay for them out of pocket. It’s a sensible scheme since there are many things that go into a house, from appliances to light fixtures to carpets that don’t last nearly as long as payments on the mortgage. Over 30 years, a $300 light fixture would cost almost $850 on a typical current mortgage. What are the chances that light fixture would still be in use?

7. Fat is hot. And cool.

Good structure and insulation requires walls that are fatter. For a long time, our minimum wall has been 6 inches thick. With high density insulation, we’ve been able to achieve between R-22 and R-26 with this thickness. But more is better and we are now building most of our homes with an R33-35 standard and a wall thickness that’s closer to 9 inches. Still, some clients want more, so we have projects with walls that are 12 inches and even 16 inches in thickness. Our clients are investing in the real comfort that comes from shelter from the heat and cold with minimal or no expense.

8. Do some work yourself.

Especially with finishes, our clients are choosing to work on their homes in the building process to save construction costs. They are willing to paint, put down flooring or carpet, tackle landscaping projects, and sometimes much more. “Do it yourself” (DIY) homeowner involvement in homebuilding represents both true savings and an opportunity for people to be intimately connected with the making of their living environment. A home should adapt to those who live in it, and the beginning of adaptation is for homeowners to have experience and knowledge in making and remaking the space they dwell in.

This economy is a hardship on many, but these New House Rules are better than the rules that steered us to the waste and excess that ran rampant in the boom years. I had hoped that it would be a vanguard of well-intentioned homebuilders that would lead us to a better standard of homebuilding, but we can only do so much. The real path to affordable, sustainable homebuilding is through the adjusted aspirations and attitudes of our clients. As homebuilders, we need to be able to deliver on the the new requirements, but it is our customers who truly pave the way.

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