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Vermontess t1_j9p573x wrote

Reply to comment by appa-ate-momo in Senate panel advances major housing bill, overhauling municipal zoning and Act 250 by DaddyBobMN

Vermont’s laws, regulations, complicated permitting processes, and slow court systems have made being a developer or landlord very expensive here relative to other states. The risk/reward ratio just doesn’t make sense for anything other than luxury housing.

This is only one part of the perfect storm that we find ourselves in, but it is indeed a large part of the problem. Will be really interested to see what they come up with. Hopeful it will make a difference because something needs to be done, even if it’s not perfect at first

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-Motor- t1_j9pb7g5 wrote

"risk v reward of luxury housing"? Risk has nothing to do with it; it's just math (profit). Why spend $100 to build something you will sell for $150 when you can build something for $200 and sell for $500?

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HeadPen5724 t1_j9ptkf1 wrote

Actually it’s more like spending $200 to build something you can sell for $150 v. Spending $250 on something you can sell for $400.

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KITTYONFYRE t1_j9pehk9 wrote

the risk is whether there is someone who wants to buy that $500 item vs if you had just built two of the $150 item for the same amount of money and definitely had buyers.

it's way more complicated than your simple math equation. of course there's risk for investing in real estate lol.

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-Motor- t1_j9peuao wrote

There's more risk in cheap housing. People that can afford a mortgage for a cheap house, can't actually get the bank to lend them the money. I don't see $400k+ pro homes sitting empty.

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KITTYONFYRE t1_j9pgir3 wrote

do you know why you can see plenty of houses for 300k+ on realtor.com right now, and barely any for 200k under? because the cheap ones are bought up immediately.

anyone who can afford a mortgage for a cheap house can easily get a mortgage. it's really not hard to get a mortgage if you can actually afford the house. i can ACTUALLY AFFORD a sub 200k mortgage, but I've been approved for a 260k mortgage. it is way too easy to get approved for way too much mortgage.

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-Motor- t1_j9phdu0 wrote

This is about new construction. That's where your started. Contractors aren't making cheap housing because it's not as profitable for almost as much effort. Period. No one, that isn't on some sort of government funded or outreach/charity endeavor is making cheap housing. And go talk to a realtor or a lender about $90-150k homes and prospective buyers credit. I'm in a family of bankers and mortgage brokers.

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KITTYONFYRE t1_j9psi6f wrote

> Contractors aren't making cheap housing because it's not as profitable for almost as much effort.

Wrong! Contractors aren't making cheap housing because they literally can't due to current regulations. All condo buildings are luxury because they have to be, it could easily be profitable if there was less regulation around building multi unit mixed use housing in VT.

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ElBrazil t1_j9tsico wrote

> Wrong! Contractors aren't making cheap housing because they literally can't due to current regulations.

It doesn't matter. If regulations allowed cheaper housing to be sold at a profit, developers will still target the highest margins first, which is going to be the more expensive units

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KITTYONFYRE t1_j9uckft wrote

maybe. at least the option would exist, and no doubt that option would be taken more than its being taken now (ie, never)

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wholeWheatButterfly t1_j9qdy60 wrote

The risk is there end up being more regulation on affordable housing because Act 250 comes into play with 10 units or more, and developers are generally going to want to build more than 10 cheap units at once (whether in an apartment building or single family neighborhood). Once Act 250 kicks in, it is a uncertain bureaucratic process which could lead to years of disputes (which adds to cost), and even ultimately shut down the process. It's much easier and less risky to build one or a few luxury houses because it is less regulated.

I think lots of developers would prefer to make 20 cheap homes than spend the same amount on fewer luxury homes, but it's just a risky process with act 250 on top of other permitting and zoning. Making tons of cookie cutter houses or an apartment complex is, in many ways, easier than making a handful of luxury homes, since you can much more easily reuse material and designs.

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