AUSTIN – (By Ralph Bivins, Realty News Report) – The nation’s housing market is “broken,” says John McManus, vice president and editorial director of Hanley Wood’s residential group. He argues that buying a new home has become unattainable for many middle-class Americans.
McManus noted that millions of jobs have been added in recent years and that a typical wage for many of those positions is around $65,000 a year. Yet builders have largely failed to deliver new housing that is affordable to those earning middle incomes, he told attendees at Hanley Wood’s Hive Conference in Austin.
“Housing is broken because businesses—when they tally land costs, fees, labor, materials, and capital—are seeing their profit margins pushed toward non-viability,” McManus said. “Housing is broken because the only projects builders, developers, architects, distributors, and investors can currently deliver profitably are unaffordable to people who earn average salaries, take home median wages, and live ordinary lives. Housing is broken because the only time housing becomes affordable is decades later, 25, 30, 40 years from now, when today’s new homes are old, used, and in need of repair. We have to change that.”
To address this gap, designers and builders are focusing on what’s known as “the Missing Middle”: housing types that sit between single-family homes and large multi-family complexes. Thoughtful design and different building models can produce housing that better matches the needs and budgets of moderate-income families.
“Housing is broken because more people than ever are housing-overburdened, and that number keeps growing,” McManus added, stressing the urgency of creating accessible options.
Chris Herbert, managing director of the Harvard Joint Center for Housing Studies and another speaker at the Hive conference, observed that the market’s current dynamics mirror conditions from roughly 30 years ago. Then, as now, homeownership rates were declining while rental demand was rising—illustrating that the core challenges have persisted over decades.
Dec. 10, 2018 Realty News Report Copyright 2018