As the rising cost of single-family homes continues to price out middle-income buyers, West Michigan homebuilders are working to meet the demand for more affordable, quality homes.
According to data from the National Association of Home Builders, more developers nationwide are beginning to build for the “missing middle,” or moderate-income homebuyers, rather than building the larger, more affluent homes from years past.
NAHB data shows the average size of new houses fell for the third straight year in 2018. Median square footage of single-family houses decreased to 2,320 square feet last year after peaking at more than 2,500 square feet in 2015.
In West Michigan, major homebuilders like Sable Homes have been working on both issues. Sable Homes President John Bitely told the Grand Rapids Business Journal his company has been working to answer these national issues occurring in West Michigan.
“Residential developers, like us, want to help and sustain the communities they’re building in, but their hands are often tied to unreasonable municipal government requirements,” Bitely told the GRBJ in a March 8, story. “After years of larger lot-size developments, local governments are struggling with how to handle the need for additional housing and the need for ‘missing middle’ homes in their respective communities. We hope local municipal governments understand the need to adjust their building requirements and zoning ordinances in order to help today’s homebuyer purchase their dream home.”
Bitely recommended local municipalities adjust building requirements and zoning ordinances, as the cost of conforming to such requirements translates to a higher home price for the homebuyer.
Citing data from NAHB, Bitely said as much as 27 percent of the cost of a new home could be attributed to municipal regulation, meaning the price for what would otherwise be a $200,000 home would go up by about $50,000.
“The consumer has to wake up. If they don’t want to pay more for houses, they have to speak up with their municipality and make it clear to the planning commission that they want new homes built, and they don’t want them on great big lots for people who can only afford McMansions,” Bitely said. “We could take 40 acres and put 20 houses on it. Now I have to use 80 acres. It’s dumb land use.”
Bitely also said West Michigan could face more serious trouble several years down the road. While the regional economy came out strong from the recession compared to the rest of the country and still hovers at about a 3 percent unemployment rate, West Michigan workers still need a place to live.
“A lot of these problems only get worse nationally,” he said. “What I’ve experienced in my career, we lag anywhere from three to seven years behind everything. As big as the affordability crisis is nationally, it’s not as big here, but it will be.”
Read the full GRBJ story, here.