Taking on the Affordability Challenge

Headshot Final__Ken Perlman

Lesley Deutch

Ken Perlman

June 22, 2021

The housing market continues to see massive price appreciation, and affordability has become a top concern among developers, builders, and home buyers.

Here are some creative ways we see builders combating affordability (and succeeding!)

Builders ARE finding design solutions.

Creative density solutions across the country are helping produce more attainably priced homes in this insanely hot housing market. We love what Boulder Creek Neighborhoods is doing with its Wee Cottages product in Denver Colorado. A survey JBREC recently completed in partnership with ProBuilder found more than one-quarter of architects nationally are working on projects now that are more dense than they were last year. JBREC’s consulting team has been active in looking at homes that include everything from Accessible Dwelling Units (ADUs), manufactured elements, and residences made from repurposed materials such as shipping containers. Builders can also gain insight from their rental counterparts. We are working with apartment developers who are scaling down amenity offerings to allow more units and lower rates. The Build-to-Rent industry is following the trend as well and considering traditional apartments in a community to create more density and lower rents

Buyers have more flexibility to work in one place and live in another.

Make your floor plans work for them! Our surveys show that households will continue to work remotely, even when the pandemic has passed. We are projecting about 9 million households will work from home 10 or more hours per week and an additional 4 million will do so at least part-time. Bloomberg reported this week that remote working was a must have for many and that most employers don’t believe being in the office five days a week is necessary to promote great company culture. There are huge design implications for new homes, especially creating thoughtful privacy solutions. Home offices can be small, should be moved away from the noisy front of the house, and they need to be quiet with lots of natural light (in strategic locations—be careful of window placement).

Educate the consumer.

Many home builders today—particularly those targeting entry-level buyers—are explaining to renters how they can become homeowners. Perhaps no company has done it better than Houston based LGI Homes who builds attainably priced, move-in ready homes, that appeal to former renters. LGI simplifies the homebuying process for first-time buyers by helping prospects understand their finances, purchasing options, and mortgage qualifications all in one place and by helping buyers understand their monthly payments rather than simply the price of the house. Other builders such as Starlight Homes have taken similar tactics, allowing buyers to easily toggle between the price of a home on its website and the monthly payment.

With prices going up, the risks do too. The winners in this part of the cycle will be those who do their research and adapt to evolving buyer lifestyles and pocketbooks. Fill out this form for other inquiries and great ideas on how to succeed.

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About The Author

Lesley Deutch
Managing Principal
Lesley has more than 25 years of experience consulting with executives in the finance and real estate industries throughout North America. She works across a wide spectrum of industries including apartments, for-sale housing, high-rise development, urban projects, single-family rental, building products, and commercial developments.
Ken Perlman
Managing Principal
Ken works with real estate executives to help them make appropriate strategic decisions regarding their residential communities, including for-sale and rental of all types. He has a particular specialty in large-scale master-planned communities.

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