Whatever Happened to the Starter Home?

The home-building industry was still constructing what real-estate ads called the "starter home" in the 1990s. He sold houses with three bedrooms in 1,400 square feet or less.

Around $200,000 in today's dollars is the price.

Today, that house would be in high demand. It is one of the few things that Builders construct like it anymore. You can't buy those Denver area homes that were built 25 years ago at an entry level price. Half a million dollars is how much they are going for.

The American housing crisis can be traced back to the disappearance of affordable homes. There is a shortage of housing in the country. There isn't enough housing that would give a family new to the country or a young couple with student debt a foothold to build equity

Land costs have gone up a lot in some areas. Government fees and construction materials have gone up in price. Today, communities are much more specific about what housing should look like and how large it should be. Some people don't like vinyl siding. Some people need two-car garages. It's hard to build a home that can sell for $200,000 today.

Mr. Nageli said that it was no longer possible to get to that number.

The detached house is all but gone from the country. Less than 1,400 square feet is the minimum size for new single- family homes. 70% of new houses in the 1940s were small.

Mill worker's cottages, shotgun homes, bungalows, ramblers, split-levels, two-bedroom tract homes are just some of the starter homes of the past. American families started their lives in rowhouses, duplexes and triple-deckers.

The local rules that shape it dictate that many small homes are replaced by McMansions or that moderate-income residents are replaced by wealthier ones. The prototypical postwar suburban starter home, a little 1948 Levittown house on Long Island, is now going for $550,000.

The problem of keeping a low-cost home on expensive land is the root of the problem.

The head of Avenue Community Development Corporation in Houston said that they were able to build a home for less than $100,000 when they first started. It wasn't the same world as we are in today.

A lot in Portland could be $100,000. The permits add tens of thousands of dollars. The cost to remove a fir tree is $16,000.

The owner of Fish Construction NW said that he had been regulated out of everything on the affordable side.

In 1977 Jerry Konter started building three-bed, two-bath, 1,350- square-foot homes for $36,500 in Georgia. Costs and design mandates made him move upscale.

Mr. Konter said that he wants to build entry-level homes. It's because I can't make a profit on it and sell it to that person.

There is a conflict between reality and demographic. Even though the average American home has grown larger, the typical household has fallen in size. Demand for smaller homes is expected to be driven by the Downsizing of baby boomers and young adults. Young buyers who have more debt will be more diverse.

A new home has grown.

The typical household has become smaller.

The changes may force people to rethink what a starter home looks like. There are places where single- family houses are out of reach for many.

There are no starter homes for less than $300,000 in some parts of the country today. There are 17 single- family homes with at least two bedrooms for sale in Raleigh. There were six in the Denver metro.

Felecia Ellis is looking for a home in the $200,000-$250,000 range.

Ms Ellis said she knew she could afford the home she was driving through. She pulled out her phone as a sign of hope. She can't afford it and the answer in the listing is that.

She said, "You need to be kidding me." "'This house is $425,000.'"

A lot has been done by the starter home. Shelter from landlords and inflation is provided by it. It has been a place where small businesses and community institutions can get started. It was more flexible in the past. Adding a bathroom when indoor plumbing arrives, a second unit to collect rental income, and a garage is all you need.

It is flexible and can be changed over time according to the dean of the City College of New York.

All kinds of models were used to solve for affordable, entry level housing in the early 20th century. The arrival of the car made it possible for people to move further out.

Nolan Gray, the research director at California YIMBY, said that a starter home is going to be a two-bedroom detached house on a 7,500 square foot lot.

White families were the first to benefit from the suburban model. As the land within a reasonable driving distance of downtown became available, the economics and politics shifted.

The land became more expensive. Communities didn't allow housing on smaller pieces of it They did the opposite by making it harder for builders to build small, more affordable homes. They required more expensive materials and smaller homes. Flat facades were not what they wanted.

Joseph Gyourko, a professor at the Wharton School of Business, said that local communities have gotten better at limiting development that neighbors don't like.

The rising cost of land has pushed up the cost of building on top of it. More of the burden for funding public infrastructure has been shifted onto homebuilders.

A builder who can only put up one home on a small piece of land will build a large one.

The result is that more affordable homes are less likely to be the same. It makes sense to tear down a small house on land worth $500,000. When there are so few entry level homes to buy, a family earning $60,000 will compete with a family earning $150,000 a year.

Ed Pinto is the director of the A.E.I. Housing Center. The rambler is 1,200 square feet.

It is now selling for more than one million dollars.

There were bungalows in the Greater Heights area of Houston. Chain-link fencing and poor carpeting were standard in cheap rental housing in the 1990s.

Bill Baldwin is a local broker and city planning commissioner.

Houston has relatively low land-use restrictions and has a booming townhome boom. It is not impervious to rising costs.

The last result of these forces is that investors who jumped into the housing market during the Pandemic have been attracted to entry level houses as well. Rental houses are more reliable than high end homes. They can house the people who can't afford them.

To put entry-level housing on land that has been reserved for one home for decades is the simplest way to do it.

The outcome would be similar to housing built a century ago, with more duplexes, more rowhouses, more homeowners adding their own rental units.

Daniel Parolek is an architect and author of a book called "missing middle" housing.

Mr. Parolek designed a model outside of Salt Lake City. They attached small two-story homes to the side of the row house. The homes were put on the market in 2015.

He said that it was a home run when they built them. Since then, costs have gone up as well. Most communities wouldn't allow it, so the builder didn't repeat it elsewhere.

There is nothing better about high-end homes. The profit margins aren't generally higher. They want more options. It is riskier to build in economic downtime. Demand for entry-level housing is always high.

Builders would return to that part of the market if more communities allowed it.

He said that they would thrive in it.

In Portland, where Mr. Wood has been trying to build entry-level single-family homes, there are now multiple units allowed on previously single- family lots. Mr. Wood wants to build triplexes and fourplexes.

He said that the last single- family detached homes in Portland were built in 2022. I don't believe we will do it again.

Additional work by a man.