Buyers want closer-in and affordable; builders say challenge often too costly|[4/30/06]
Published 12:00 am Monday, May 1, 2006
Lately, the only ideas for low-income housing have been the tightly packed arrangements planned by out-of-state developers taking advantage of hurricane-related federal tax incentives.
But, the dearth of similar housing continues from the purely private sector.
Local Realtor Pam Beard of BrokerSouth GMAC Real Estate reviewed figures for 190 properties now listed by her company as available for purchase in Vicksburg and attributed it to the current state of doing business in the home construction industry.
“I think the builders aren’t building them because there’s no profit in building them,” Beard said, pointing to company listings showing 80 of those properties priced below $100,000.
Of that, just 36 of them are going between $100,000 and $150,000.
Only 14 of them were built since 2000, Beard said.
The demand for all those properties exists, but not the supply, Beard said.
“We have a dire need for affordable housing, something for the entry level part of the workforce like teachers and police officers. I’d love to see ‘cabbage patch’ houses. We’d sell them all day long,” Beard said.
Homes categorized as “small” are typically 1,200 square feet, appraiser Doug Upchurch of Jones & Upchurch Inc. Real Estate Agency said.
Those at around 2,000 square feet are “average-sized” homes, while homes categorized as “large” usually measure between 2,800 and 3,400 square feet, Upchurch said.
Lot sizes do not usually dictate what type of home is built in any given subdivision, Upchurch said.
“Some people don’t want a yard to cut. Some have zero lot clearance but will still buy the house if it’s nice,” Upchurch said.
As for the profitability, or lack thereof, of building smaller, efficient housing, local builders say the reasons are in the numbers.
One reason, said self-employed builder Bill Harris, is the cost of raw land.
“I once paid $1,500 per acre, but now sometimes I pay about $15,000,” Harris said.
Costs per square foot are higher on a smaller home built on a cheaper lot, Harris said, using the example of a lot valued at $50,000 and sized at 1,500 square feet.
Another factor Harris cited is the rising cost of fuel and moving material like asphalt and piping, something he indicated is making construction of all types more expensive. This has added to the burden of building subdivisions with smaller, more efficient houses, Harris said.
Eventually, he said, subdivisions laid out with many small houses drives up the bottom line more than one featuring fewer but larger units.
Harris has overseen the construction and development of both residential and commercial property since about 1973, he said, including the Fairways, Willow Creek, Lake Park and Lakewood Hills subdivisions.
His current development, the Savannah Hills subdivision off Indiana Avenue, is in its second phase, Harris said, adding that it is the first in-city subdivision since Vicksburg’s last annexation in 1990.
Harris said the 21 lots under development will sell for up to $60,000. The homes already built and occupied ranged in price from $275,000 to $450,000.
The progress of Savannah Hills fits with the upward trend he has seen in the demand for in-city housing.
“People do want to be closer to shopping, churches and those things,” Harris said.
That desire to buy closer to the city’s leisure trappings does not figure to change the economics of building homes, however.
“It’s an age-old problem,” said Joe Bonelli of Joe Bonelli Construction.
Bonelli said his labor costs, coupled with the price of materials, have shifted the focus of his business to higher-end subdivisions and commercial properties.
“And it will be until someone figures out how to build a cheaper house,” Bonelli said.