Buyers, Builders See Different Paths to ‘Attainable’ Housing
April 22, 2019
Housing developers recognize the broad demand among home buyers for modestly priced new-construction homes but differ with consumers on how the nation should boost its supply of so-called “attainable” housing, according to a report from the Urban Land Institute.
Developers say it’s worth limiting community amenities, opting for lower-quality finishes, and building in less-desirable areas to limit costs, according to a ULI survey of its Community Development Council, which shares strategies for planning, financing, and developing master-planned communities. But home buyers see things differently: Research shows they want to live in amenity-rich neighborhoods in attractive locations and are willing to give up space in their homes and live in denser communities to achieve those goals, ULI says. The findings, released during the Urban Land Institute’s spring meeting in Nashville, Tenn., last week, are based on a survey of members of the organization’s Community Development Council conducted last fall.
According to the ULI survey, builders cite the cost of capital, lack of building efficiencies, impediments to financing for buyers, and the cost of materials as the most significant challenges they face in building housing that meets the needs of middle-class Americans. In addition, developers want subsidies and support from communities and local governments to help them build more attainable homes.
Even though participants in the ULI survey believe the market is showing a need for attainable housing, more than a third are not building any homes that fall into that category. Only 15 percent of the developers feel that at least a fifth of the homes they are constructing are affordable to middle-class buyers.
Builders have focused on building homes with at least four bedrooms, even as the percentage of one- or two-person households has increased, contributing to a growing disconnect between the housing needs of the middle class and the supply of newly built homes. Just 10 percent of newly constructed homes have one or two bedrooms, while half come with at least four, ULI says.
Updated: July 23, 2019