WISENBAKER: Building better communities with home ownership
Gary Wisenbaker
The very gravamen of the argument for a capitalist economic system is the development and protection of a strong system of individual property rights.
Property, of course, is both real and personal. And it is axiomatic that the concept of the unfettered use and possession of any property sets the capitalist system apart from all others on the planet.
So important is this right that it is enshrined in the Fifth Amendment to the Constitution of the United States.
The concept of private property is most commonly associated with real estate: farmland, homes and commercial buildings. And while the government may curtail or abridge the undisturbed right to possess under certain circumstances, such as in zoning laws or appropriating land for roadways or other public projects, it has a tremendous burden to carry in doing so.
The primary focus of the current private property conversation deals with housing. And more particularly, in private residential housing.
With the advent of the rousing housing market sparked by the artificially low interest rates which pushed the increase in housing prices (equally artificially some might suggest) and the near-overnight correction of rates back to the mid-single digit range, the fear of the exodus of the homebuyer from the market caught traction.
However, surveys indicate this isn’t the case. Home buyers are still out there and still looking. Trade publications not only see a light at the end of the short-lived housing market stagnation but now suggest the market is on the other side of that tunnel.
And all this is well and fine for the seasoned homeowner who might be contemplating a lateral move or a move to downsize or a need to upsize.
What about the first-time homebuyer and that starter home?
Construction prices at the lower end of the price range that are aimed to get new buyers into an affordable home recently skyrocketed with the mortgage interest rate collapse. While they’ve settled down a bit, costs continued to push those prices upward.
These prices have a chilling effect on the new buyer keeping them in their rental units longer which, in turn, results in an increase in rental rates.
Jerry Konter, prominent Savannah, Georgia builder and past chairman of the National Association of Homebuilders, knows what he’s talking about.
He recently suggested that getting rid of the tariffs on Canadian lumber, which is the source of 30% of the lumber supply used in the United States, would go a long way in bringing down material costs. He also thinks the labor shortage (and costs) can be best addressed by federal, state and local governments encouraging vocational training for high school kids rather than putting everyone on a college track.
Among other ideas, Konter says, “Local design standards that have nothing to do with safety” should be re-thought and “… state and local officials must overturn inefficient zoning rules, lower impact fees and other upfront taxes associated with housing construction (and) expedite approvals for affordable projects ...,” among other tweaks.
These ideas have merit.
Getting folks into houses that they own is a laudable goal on many levels. When that happens, we see stronger and more stable communities. Other social benefits include a higher degree of volunteerism and lower crime rates in those communities.
Individual homeowners enjoy improved financial stability by increasing their financial strength and it has the effect of pulling them into the community. And this is a self-esteem and self-worth builder as well.
The road to home ownership begins with a first step, the starter home, and that road should be an expressway and not a dead end. And it is up to government — local, state and federal — to remove the redlights and stop signs.
Gary Wisenbaker is a Realtor with Century21 Realty
