I literally just built a house for ~$60k a couple years ago. A burned out trailer even in a rural shithole with no jobs in my state is about $100k+. An actual functional house, $250k+. This is counter-intuitive but it makes sense in context of the recent COVID 0 real interest mania.
Meanwhile all the shithole land with no "dwelling" on it was never eligible for mortgages so people weren't able to bid it up to oblivion on debt that they locked in with 30 year mortgages so you get weird results like the cost of vacant land is way cheaper than the same piece of land with a house that can really only be bulldozed (latter would be cheaper in most times in history). End result is I built an entire house on property cheaper than a burned out uninhabitable trailer. Building on unmortgagable land is a way to bypass the fact houses are all locked up in 30 year loans at negative real interest rates.
End result is it's far cheaper to build a house than buy even a shitty burned out one because to do the latter you have to buy someone out of their money printing machine of a negative real rate loan, which obviously they are only willing to do for a king's ransom.
------ re: location ---------
I won't share my address but if you are looking to do this yourself: look up fishing canneries in Alaska, most of them are close enough to cheap plots you could do this on, often even without permits or property tax. These canneries are also usually desperate for workers and pay a livable wage to those with refrigeration technology certifications.
I'd like to see what kind of house you built for 60k. My assumption is its some small maybe 300 sqft box with no sewer you spent many hours yourself building. Not something something most people would do and while cheap in dollars certainly isn't affordable if you are putting a lot of work into it.
It's basically looks like a glorified rectangular shed but it does have sewage, electric, water, and hvac. Not very impressive but every single person I've had over who's lived in an apartment has expressed interest in learning how to do the same over paying rent out the ass for a similarly sized uninspiring shit-box and ending up with no equity.
The only people that have been over that have been unimpressed are people already living in an actual house, but that's not really the target audience for this kind of thing.
---- re: below [my account is throttled] ------
I speculated on an old well share that turned out to be good, so got a well for basically nothing. If you don't have such luck you can haul water.
I use septic, which in some counties (mine) no requirement you be licensed to build. It can be built with only a shovel and some pipes and concrete if you are on an extreme budget, although helps a lot more if you can get ahold of an excavator.
If I understood you correctly, land that has no building on it is not eligible for a mortgage, and is therefore cheaper to buy? With the downside that you have to pay cash, because you can't get a mortgage either?
Yes the land value is so insanely cheaper on un-mortgagable properties in my state, it's off the charts.
I have developed land in my county so I'm familiar with the costs to develop, buy land, place utilities etc. (I did not become a land developer on purpose, only because I realized this absolutely crazy arbitrage)
It would cost you about $200-$250k to buy a rural small acreage land with a manufactured home on it. If you pay cash for the land and drop the exact same manufactured home on it, it would only cost you about $150k, and you would get a brand new house instead of a "used" one.
There is huge pent up demand for someone to just buy a huge swath of small acreage properties and just drop the cheapest manufactured home you could on it as the non-luxury starter home market is currently not being met. You could pretty much double your money. I'm not sure why this isn't being done en masse although a few private actors seem to be doing it and making a killing.
This is not true. Building all types of housing increases the supply of affordable housing.
Build a new luxury apartment, and someone moves from a mid tier apartment into it, and someone moves from an affordable apartment into that, and so on.
Price is a function of constrained supply. The type of supply is not important to increase the numbers.
Yeah, that is big one. Perhaps we need to rethink housing. Shared restrooms, bathrooms, and kitchens. Keep the same restrooms on every floor. A gym with individual showers and a food court on specific floors.
> What will distinguish these structures from slums in 10 or 20 years?
The neighbourhood. When I moved to New York in my twenties, I had roommates. Everyone had roommates. That meant sharing a bathroom and kitchen. Not only did this breed camaraderie and teach me to not be a dick, it also freed up cash so I could enjoy the city and save.
Genuine question, who would actually want to share an intimate space like a kitchen or bathroom with dozens of other strangers on a daily basis? This is obviously a common setup in college dorms or prison, but that is specifically because it’s a temporary (and extreme) cost saving measure, or because you’ve lost the right to participate in society (i.e. prison, which is viewed by some societies to be cruel and inhumane). I lived with housemates for many years to save money and afford housing, but I could at least choose the few housemates with whom I shared those spaces.
I honestly do not know hoping that someone smarter than me figures it out. I suppose it will depend on the execution. If it is comfortable, looks nice, if it creates community, amenities, price, location, etc.
Except this goes against American individualism on every front. Americans really only fit one sort of mold in terms of what they want: single family home, owned outright (usually mortgaged though). You can extrapolate that out to cities as well: young urban professionals pine for polished condos or lofts with nice views and located in trendy neighborhoods, but their "unit" is still theirs totally, with no shared primary amenities (by that I mean kitchens and bathrooms, not features like pools or gyms).
It just so happens that America is luckily predisposed to this kind of living, with an abundance of space to accommodate lots of people in their own non-shared living spaces. The problem with that though is that you limit the opportunities for business, because space is cheap, so you have to implement regulations and zoning to create opportunities for moneymaking and before you know it you can't actually build housing anymore, despite the abundance of space sitting right there.
American cities were replete with dorm room style housing. These were especially popular with new migrants to the city.
An incredibly large percentage of apartments in cities like NYC are used as multi family housing with several housemates sharing them to save on rent.
The reality is that the reason such housing doesn’t exist/isn’t more widespread is because cities have passed laws eliminating them. Before the white flight to the suburbs, the attempt was to keep the poor out of cities where the rich lived by eliminating housing of this sort since the poor couldn’t afford single family housing.
This led to a proliferation of laws that required bathrooms and kitchens in every unit, etc.
It's easy to live in shareable spaces when you're young and unattached - it becomes a lot more difficult as you age and want to grow a family. I'm not sure I want the kind of life where I have to share a kitchen or a bathroom, spaces I consider very private, with people I'm not related to. Maybe this is a uniquely midwestern/American sentiment, I'm not sure. But I am confident that there are more people like me than there aren't. The picture of the American dream is familiar, it's a house with a car in the driveway. I feel that may just be who we are now, regardless of any way we used to be.
Edit cause I had more thoughts:
Honestly, probably one of the biggest mistakes we've made as a country have been not putting up enough resistance to RTO. The single family home is, I believe, probably one of the nicest standards of living in the world. Plenty of space for hobbies and activities, privacy, usually some community among neighbors. The only problem is that it's hard to square the circle when it comes to single family living and living close to an economic hub. To afford this standard you have to live close enough to a hub that you can afford one of the well-paying jobs that exist there, but not so far that your commute significantly eats into your life. With RTO, I think we lost a pretty good opportunity to weaken our dependency on the geographic economic hub. We could have had a diaspora of knowledge workers which gave people the opportunity to pursue a better life at a lower cost, and we sorta just threw all of that away.
Isn't it also the fact the almost no one wants to live like that? The expectations has changed and there's probably little demand for such type of housing.
When the choice is between $3000/mo for a proper apartment and $2000 for a flophouse room some people will take the flophouse. Right now the only choice we offer those priced out is a painfully long commute (with has its own time and car expenses that reduce the savings).
Commercial buildings can't be easily converted into housing that provides the same return. Once the current owners have gone out of business it'll be profitable to turn them into flats.
The arguments against conversion assume you care about the current owner's financial situation.
It's not so much the owner's financial situation, but rather that it'd be cheaper to build new homes than to retrofit a ten floor+ building's plumbing.
You'd also have to install a bunch of showers, which could be a significant problem on its own.
And then there's the increased amount of sewage, which the building might not be able to handle - even the local sewers might not be equipped to handle the uh... Load a large commercial building would generate with 24/7 occupancy vs 8/5 occupancy.
The reason you don't see folks converting commercial spaces into residential isn't because it's not wildly profitable, but because building new purpose-built residential buildings would be cheaper than a conversion for anything other than one or two floors.
> You'd also have to install a bunch of showers, which could be a significant problem on its own.
Compared to installing a new domestic water pipe riser and drains in an office tower (plus pumps, pressure tanks, etc), installing a shower in each unit is essentially free.
Connect the in-unit supply lines to the tap, core drill a hole in the floor to get to the floor below and connect to the drain piping, done.
You can also just raise the shower and toilet on a platform, plumb the waste directly to the wall while depending on the platform to buy you some vertical slope on the way out, and drill right through the side of the building and run the waste vertically down the side. It's not going to freeze on the way down unless you're in Yakutsk. The supply lines you might not even have to retrofit, just put a pressure tank on each floor for peak loads that are slowly topped off by the undersized supply lines.
More toilets, more sinks, plus laundry. A floor of apartments will use far more water than a floor used by an office tenant. A 20k sqft office tower floor might have 6-8 toilets and 6-8 sinks that see light usage for 40 hours a week.
> Commercial buildings can't be easily converted into housing - notably, plumbing is not designed for smaller units and can't be retrofitted
I still haven't seen numbers that show this is a physics problem versus zoning problem. Worst case, make some things (e.g. washers and dryers, maybe even showers) communal.
Having lived in some midwestern cities with a bunch of extra "not easily converted" warehouses, I've seen lots of "illegal" art collective operations where they just put all the extra plumbing on the ground floor where it is easily retrofitted (you can even raise the floor with a false bottom for plumbing if no other option) and then everyone shares a big kitchen, then the upper floors where retro fitting is more difficult are for habitation. Maybe the HVAC unit is undersized or something, or some other safety factors are substandard due to these people not having the money to improve it further, who gives a shit it is better and safer than living on the streets.
Obviously since it's illegal these aren't advertised but they're quite prevalent, and issues are rare enough that now decade past muh Ghost Ship Warehouse is the constant drum being beat by the brain dead building code worshippers who actually bought the line of bullshit that having people homeless and freezing and shitting in the streets was actually a 'written in blood' advantage.