Seth Fowler: Solutions to North Texas Affordable Housing Crisis
Share News:
We need solutions to the North Texas housing crisis before it’s too late
In Part I we learned that there is a Housing Crisis in North Texas
In Part II we learned that New Construction Not Helping Housing Crisis in North Texas
In Part III we learned about the first-hand Struggles of Finding a Home in North Texas
Now let’s talk about solutions to this crisis. Notice I said “solutions” with an “s” because there isn’t just one fail-safe, simple way that this housing crisis will be solved. It’s going to take many different methods and changes to see real improvement.
Expect & Accept Change
As I’m finishing this article I’m listening on the TV about all the devastation that Hurricane Harvey has caused in Texas. If you think new construction in the D/FW Metroplex has become expensive, cumbersome and lacking in quality lately, just wait until builders, contractors, suppliers, materials, and labor flock to the Houston area.
However, this could be a tremendous opportunity to open our eyes to new forms of home building.
Modular home construction can be part of the solution. (No, no, no … I’m not talking about mobile homes or trailer parks, so just get that out of your mind right now.) I’m talking about well-built homes that are created in a controlled environment that provide all solutions and benefits of site construction but at a much faster time frame, more supervision, and quality checks for a greatly reduced price vs. site built new construction.
Doing the same thing over and over and expecting different results is the definition of insanity, said Albert Einstein. This is the home building industry of today
We have to change our mindset when it comes to homes and construction. Change has to take place and we have to accept that. No one likes change, but doing things the way they currently are in new home construction is just the epitome of insanity.
Don’t Think Like a Texan
Texans love their beer, BBQ, guns, and land … nothing wrong with that, but not everyone needs land. Where in the Texas constitution (and its million amendments) does it say it’s the right of every Texan to have 6,500 square feet of property (or more)?
We need to get past the mentality that every home needs a large yard. Sure there can be some yard, but on average, the typical tract home offers more than 30 feet of yard space, and that’s not including the 20- to 30-foot front building line setback.
If it were allowed, having homes with reduced front setback and smaller backyards could help create a more affordable property. This happens in other areas of the United States and around the world. It’s not a new concept, but it’s a concept that needs to be implemented in Texas.
Land is at an all-time high price point right now. Density needs to be increased in order for developers to make their deserved margins. By reducing the size of the homesite, density can be increased, the lot basis of the home will be reduced and home prices would decrease. Parks and community areas for playgrounds, walking trails and neighborhood activities could be created to offset the reduced sizes of the individual yards.
If real change is going to occur and solutions are going to be possible then we have to change the mentality that every home needs a big yard.
Blight Busting Solutions
“Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus.”
Agent Smith, The Matrix
There is a lot of truth in that. We all know it. We all pass by it every single day. It’s urban blight.
Developers go into areas and build these “big box” shopping centers and strip malls and massive impermeable parking surfaces. Residents in the area are excited because a new store is going to be three minutes closer than the older store that sells the same thing.
After a few years, the parking lot needs repairing, the stores are out of business and there is another area three minutes away that has better stores. Now all that’s left is an abandoned shopping mall or strip mall or grocery store left to rot.
I say, bust the blight!
Sure it takes money and creativity, but re-purposing areas of D/FW that are abandoned and left to rot could be a fantastic opportunity to build a new community of homes.
Soon grocery stores and large parking surfaces will be obsolete – one of many solutions could be to use blighted areas for urban residential that is affordable?
With Amazon breaking into the grocery delivery business, how many large grocery stores are going to sit vacant? Those large buildings and parking surfaces would be a perfect spot for urban housing.
Hopefully we aren’t the “virus” that Agent Smith called us.
Go Small … Not Tiny
We’ve seen the shows, and we’ve imagined what living in a 300-square-foot home would be like. While it might seem cute and fun, I’m skeptical that the Tiny House Movement is truly sustainable.
Do people really think they are going to live happily ever after in a home the size of a trailer? I’d wager that in five-to-ten years we’re going to hear the stories of tiny house failures.
However, there are solutions to glean from this movement. One is realization that we don’t need large spaces in which to live. Another is that smaller homes can still be packed with many amenities. The epiphany that many are having about the benefits of downsizing can greatly impact the North Texas housing crisis.
One solution to the housing crisis would be to create an affordable product under 1,000 square feet. If a builder could produce a line of homes 700 feet to 1,000 square feet for under $250,000, it would go like gangbusters.
Young professionals and empty-nesters don’t always need three bedrooms, two bathrooms, and a study in 1,500 square feet. It’s not always necessary to have a private master bathroom, guest bedroom, attached garage or formal dining area.
We need builders to get creative with floor plans and materials to be able to provide a quality, smaller home that isn’t just a bunch of wasted space and added costs.
What we learn from the tiny house era is that we really don’t need a bunch of extra space. If we have more space we will just fill it with more stuff.
Shake Up City Hall
Herein lies the biggest hindrance to creative affordable housing of all. The bureaucracy and idiocracy of stubborn municipalities with antiquated zoning laws and restrictions, impact fees, and outdated mandates that are absolutely killing progressive solutions and ways to increase urban density while keeping home prices affordable.
Local municipalities in D/FW need to stop being the problem and start being part of the solution when it comes to innovation and housing.
I’m calling you out, D/FW mayors, city councils, zoning boards, and anyone standing in the way. Shame on you all for being more concerned with keeping your jobs and positions rather than being willing to be progressive and innovative when it comes to affordable housing.
You are all on notice! Get on board with change and new ways of thinking or get out of the way.
Public Transit
Wherever these new affordable homes are going to be built they have to, have to, have to have access to quality public transit or it won’t work. These new communities are going to be for everyone — Millennials, young families that don’t want to be in the ‘burbs, empty-nesters — and not everyone will want to have their own vehicle.
Location and access are so important to making this new concept in homes and neighborhoods a success.
Where To Start With Solutions
No one said revolutionizing the affordable home market was going to be easy. So where do we start?
While researching for this article I came across so many innovative companies.
- Blokable: think Legos of home building
- Kasita: more in Tiny Home vein but really exciting what they’re doing in Austin
- ExpressModular: very stylish designs for fraction of site-built construction
Okay, I’ve thrown some solutions out there. What do you think? It’s a daunting task isn’t it? No one said it would be easy … but it is necessary.
When sharing my ideas with other solution-hungry developers and builders, I always get the same push back. “It’s too hard dealing with City Hall.” “No one is going to want to lead this initiative.” “It’s easier doing the status quo.”
It’s happening — just today it was announced that Berkshire Hathaway’s Clayton Homes purchased Oakwood Homes, Colorado’s largest privately held home builder, and their 18,000 homesites. The modular home construction revolution is beginning.
I would love to see an ambitious developer in the D/FW area to take a chance. Start with a development with minimal yard sizes, a large neighborhood park, home sizes from 700 to 1,500 square-feet, no attached garages, innovative floor plans, designs and materials. Increase density while not creating an apartment complex. Create access to public transit, walking trails, shops, entertainment and other points of interest so that the development is attractive to everyone.
Can it be done? Maybe. Maybe not. Inevitably all affordable homes increase in value and soon become un-affordable to many in the market.
At least it’s worth a discussion isn’t it? Would love to hear your thoughts.
Well that’s all from Tarrant County this week, Dirty Readers. Remember, if you have comments, questions, or ideas for future stories – I’m always here to listen! Bring it.
Seth Fowler is a licensed real estate sales professional with Williams Trew Real Estate in Fort Worth. Statements and opinions are his own. Seth has been involved in the home sales and real estate business in DFW since 2004. He and his family have lived in the Fort Worth area for over 14 years. Also, Seth loves bow ties. You can reach Seth at 817.980.6636 or [email protected].
10 Comments
Leave a Comment
Great article. I think the biggest issue with high density housing in the DFW area is the lack of public transport. We think we can become great cities where everyone drives everywhere. Case in point – Plano. Lots of new jobs and fancy offices but no talk about connecting them with public transport. In that case, high density housing means clogged roads and increasing road rage incidents. This also increases local opposition to high density housing as that just means a steep decline in the quality of life.
Thanks for reading–share it with everyone you know–have to start waking people up to a real problem. So true about public transit. Ugh it frustrates me to no end that D/FW has such poor choices and few options. Look at what is going on in Arlington with all this tax payer money being spent on football and baseball stadiums…wouldn’t it be awesome if you could take a light rail to the venues and have dinner and go to a bar after the game and then get back on the light rail and be back in the ‘burbs quickly? That will NEVER happen bc of greed and ignorance of these owners and developers who just want that $50 per car for parking.
Oh don’t get me started…how are we the “most developed country in the world” and yet Europe kicks our butts with public transportation and easy access without having to drive your own vehicle. Disgraceful
We also have to re-program the notion of what affordable housing really is. It has, in the past, conjured up images of low-income “projects” or voucher-based housing. Affordable now takes on a whole new meaning and can be re-branded to include innovative, tasteful, and thoughtful design for people who can’t afford anything above $200k. Living in a community full of affordable housing shouldn’t be stigmatized. You say “affordable housing” these days and everyone clutches their pearls.
100% agree with you…and I tried to address that in earlier segments of that 4-part series on “affordable housing.” You’re so right…you say “affordable housing” and people (at least people of my generation) think of the projects and watching “Good Times” on TV and think that’s affordable housing. I’m not even going to pretend to address that kind of housing bc that’s all government subsidized and run and that’s a dumpster fire in and of itself.
How crazy is it to say “affordable housing” and really mean “Homes under $300,000″…mind boggling how quickly that has become to mean the same thing.
There are some tract builders that are doing a good job by putting a pretty good product out there in the “affordable” market…but it’s few and far between and not everyone wants to live in the ‘burbs…especially as the Millennial population starts taking over the world (yikes!) but we’re also seeing a lot of Empty Nesters and Baby Boomers getting tired of the ‘burbs but don’t want to spend over $300K to live where it’s hip-and-happening.
The desire/goal of my 4-part series was to start a conversation. I don’t know if I’m right or on the right track or completely full of it, but we have to start addressing these things…we have to re-think the way our elected boards, councils and officials are selected and have to push back on their antiquated and “can’t do” thinking when it comes to new ideas of housing.
This is going to take a while.
Thanks for reading, keep following, share with those you know…let me know if there are any topics you’d like me to address in the future.
Seth
I have appraised a few modular homes over the last 30 years. I’ve never seen one that was good quality. Modular homes sit on a wood frame foundation manufactured homes sit on a steel frame. That is the only real difference I’ve ever seen. Manufactured homes historically called trailers became mobile homes and then manufactured homes. I think modular homes where the next step. However good quality modular homes would offer many benefits. Construction cost are less. Construction time is weeks instead of months. Modular homes are significantly less expensive to buy. Of course profits are also significantly less. Maybe that’s why builders stay away from them?
Totally agree with our conception of the modular/mobile/trailer homes…I always think of those that are on the highway with the big flags with “SALE – NO DOWN PAYMENT” signs or a floating pink gorilla. From what I’m seeing (online, not in person) the newer companies in the modular world are changing the game. They are building walls and trusses and most parts in controlled environment then assembling them on-site. Yes this is not the same as the tract homes we know today stick built (although most tract builders use pre-made panel walls and trusses) on concrete foundation…but that’s also why there are very little new home tract builders under the $300K range that are any good. DR Horton is killing it with their Express product which is basically a “you get what you get and you don’t throw a fit” type product where everything is pre-determined but yet they still take 6+ months to build.
Imagine if construction took 30 days from soup-to-nuts and the homes weren’t all 100% exactly the same and there were actually good looking homes for Buyers in the $250 and under market…that’s where margin and profits are found…reducing labor needed, controlling the mishaps in the field, cutting delivery time tremendously, increasing density by reducing the municipality-mandated minimum size of homesite, taking out areas of home that just aren’t necessary or that Buyer would trade for better quality, better location, better price.
Pre-built and modular isn’t the silver bullet…who knows, maybe the new homes under $250K market just disappears entirely or is built hundreds of miles away from civilization…but at least it’s worth a try instead of doing the status quo.
Thanks for reading, keep following, share with those you know…let me know if there are any topics you’d like me to address in the future
seth
I just don’t see the value in creating stand-alone small homes with no yard. If it’s low density, then it’s a lousy garden apartment/single story condos. Sure, they made sense (and were pretty miserable as someone who grew up in one) when land prices were low vs building costs, but now that equation is flipped and a tiny stand alone single story makes no sense. So many of those homes (even in DFW) now sit empty or undervalued while larger homes and apartments are filled. Just don’t see much demand.
BTW, if you want tiny cheap homes, then don’t be so harsh about trailer homes. They are pretty common in other high-property value areas and provide exactly the type of community you are looking for – and the land lease model they use can easily be supplanted by a higher quality developer when the time comes.
Thanks for reading and commenting.
I’m not against trailer parks pe se but 100% guarantee that every single mayor in the D/FW Metroplex would never, ever, ever allow a trailer park to be constructed in their city under their watch. That ship has sailed.
Certainly there have been snafus in construction in the past – and there will always continue to be mistakes – but if done correctly, right location, right price, right product with smaller single-family homes with minimal yards with access to parks, trails, transit, areas of interest could be highly successful.
Not everyone wants to live in an apartment for the long term. Home ownership in D/FW is at all-time low around 65% and apartment leasing is around all-time high…but that’s mainly because there are no good options for those that can spend $2,500 a month on an apartment but can’t afford a house payment, taxes, insurance, upkeep of an older home in the same area.
At least it’s worth a discussion isn’t it? If we do nothing then we only have ourselves to blame for completely eliminating the “affordable housing” (under $250K) new home market all together. I’m skeptical that any real change will happen – especially in D/FW because we have so many city officials and people with power that want to just stick their heads in the sand and wait for retirement – but don’t you think it’s at least worth a try? I firmly believe that if done right, a concept like I’m talking about can be quite successful because it’s happening in other areas of the country.
Thanks again for reading, commenting and following…tell a friend
seth
“Affordable Housing” sounds like a great concept, but in reality we’ve seen over and over that it simply repeats the pattern of building our own slums. Fox and Jacobs was “affordable housing” back in the day, and look at those neighborhoods now (with a very few exceptions). “Starter Homes” is another failed experiment; people buy in over their heads, and either foreclose or buy their way into a better neighborhood as soon as they can. Section 8 vouchers are another “affordable” idea – a bad one.
Here’s an idea: Let’s have property tax reform, and quit penalizing homeowners for investing in their communities. Dallas tax rates are nothing short of ridiculous – if we reduce them, more people will be able to afford the inventory on the market. Seniors will be able to stay in their homes in retirement. It would make far more sense to reduce government to encourage growth, rather than embark on another failed social experiment in “affordable housing,” at the expense of homeowners.
Unfortunately once the genie is let out of the bottle, it’s impossible to put it back…we’ll never have realistic tax reform for our property taxes. Government officials seem to be okay with a little bad publicity with little-old-ladies losing their homes because of increasing taxes and property values if it means the city coffers will continue to overflow for wasteful spending and lousy schools.
What’s nuts is that now the California Pipeline of buyers is actually slowing down because the CA buyers are realizing that while prices might be a little lower and there is no state income tax, the property taxes and insurance costs are so out of line vs. California that they’re really not saving that much money. If that pipeline slows to a trickle it will be a very bad day for Texas!
Taxes never really go down…you know that…they just lower them one place to raise them in another.
Thanks for reading and following and commenting…share with all you know
Seth