My mission in writing these tedious reads is to empower you, the homeowner. To guide you in how to protect your home as the primary investment in your future and your country. Like I’ve said, a golden ticket. If I’m wrong, then why is private equity aggressively harvesting all that they can and significantly diluting public ownership? I’ve made it pretty clear that I’m a veteran in the industry. I’m not perfect but I am extremely observant. I’ve carefully watched what has happened to the housing industry but moreover, I’ve tried to determine why. This is important when trying to assist in repairing something while staving off the same breakdown later.
Currently, we’re in an economic housing conundrum that is very complex. It’s more than money. What we see are symptoms of a confluence of evolutionary flaws. Over the decades technology has made amazing advances. Truly. However, technology by its lonesome is pretty inert. It’s what we do with it that matters. Much is driven to improve quality of life but much is also driven to improve the “bottom line”. That’s true with anything in a capitalist society. So, we offset negative potential by regulating it. Regulation is good but, regulation isn’t free. As I’ve often said, every solution breed new challenges. So, we have a massive regulatory challenge in American to keep homes safe, durable and efficient among other things. This drives up costs. Permitting authorities are challenged to hire more qualified people to oversee all of this techno wonder. The crop of qualified recruits has grown thinner and thinner annually while demand increases. This results in high permitting costs, lengthy permitting periods and slow response times among other challenges. It gets deeper but you get the point. Now, multiply this by hundreds of other facets. Folks, it’s a pickle and we’re just discussing the few things you really need to know. Punctuating the evident fractures in the system are buildings falling down, even houses, and lives being lost. Not drama. Reality. Bottom line: Building Inspectors are your ally. Any twit that spouts they are just trying to steal your hard earned tax dollars is a moron.
One reason I’ve discussed this aspect is to help you understand how the system was originally structured to work. It’s pretty basic. Consider designers and architects the “coach” in the game. The builder, by function, is the “quarterback”. The Building Official (inspector) is the “referee”. This is a 3-legged stool that requires all 3 pillars to stand and function. A skilled and trained builder executes the design of a skilled design professional while a detached 3rd party assures compliance by ALL parties. You’re the winner! This is a good thing. Or at least it was. This model has unraveled for about 30 years now. Der.
Back in the day….(I love to say that ‘cause I’m a wheezer), when a designer completed your project design, it was put out for competitive “bid” to a number of builders. The process allowed you, in union with the designer, to vet the builders for their skillset, experience, and a number of other qualities in a competitive fashion. It required your involvement in a significant way but, really, this is your project. Your home! For the most part, construction costs have been predictable and generally stable for decades. As far as getting the work done, Insurance companies often represented the trends for “profit and overhead” ranges that were acceptable industry standards. For ages it was 10% profit and 10% overhead after carefully calculating labor and material costs. One could make a handsome living and build quality, affordable products. Still can in my opinion. It was capitalism at its finest. Generally, the best person won. Even though material costs rose annually, this margin model still worked. At least until the 80’s.
Then came a business phenomenon called “design-build”. It was born from commercial construction and conceived to shorten the permitting process for larger, more complex projects. Since the design and building schedules of major portions of a project were significant, they could be started independently while later portions of the project were still under design. In other words, the whole shebang didn’t need to be completed on paper to get the ball rolling on building. It worked and saved a lot of companies a ton of money and made large facility growth more affordable. What happened in the 80’s is that this model became attractive to some alert residential designers and builders around the country. However, a house generally does not begin to compare to the complex commercial projects the system was conceived around. So, the term “design-build” was massaged into a “new” model. It wasn’t for permitting efficiency. It wasn’t even for streamlining the process; not as you might think. It was a marketing stroke of genius! It appealed to a couple unfortunate American tendencies. Simplicity for simplicities sake and impatience. It was sold as a ‘cheaper’ alternative. The idea was a “one stop shop” for your design and building needs. Fewer moving parts and, theoretically, lower overhead. In the last 30+ years it has become an incredibly successful disaster.
The question is always, “where do I start?”. The internet has trained us to make huge decisions in less than 27 seconds on a site. That’s a little hyperbolic but only a little. So, you search “Home Improvement” or something similar and what comes up? A zillion “Design-Builders”! One-stop-shops that will usher you from dream to reality at God-speed. They often have beautiful trucks, flashy websites and tons of photos and starred reviews. One guy I met actually had laser etched metal business cards! Very impressive. Great until I learned he encouraged clients to bypass the permit process. Definitely not good. We met because he didn’t have a qualified designer on staff either! Yet he marketed his company as design-build. The ‘design overhead’ you were saving was just buried in the cost of construction and sold as greatly reduced. Some actually say it “free”! He paid my full fee AND marked it up! Say it ain’t so! Not to mention that you deprive yourself of a competitive business model. Is this how you envision risking your investment?
Where you start is with a competent, skilled designer. Period. You take your time and design what meets your needs, your budget, your vision and realistic capabilities. A designer is your advocate in the process. If I work for the builder, I’m THEIR advocate. They’re paying the bills. They choose what methods I may use, materials, virtually everything. They may “sell” you the deviations from your vision as positives. Your vision is backseat to their bottom line and skillset. Remember that 20% profit and overhead number I mentioned? It’s now pushing 40% to 50% with many builders in our metro. That’s P & O, not cost. I’ve asked you to stop the presses for a year and start planning. Give the system time to feel your absence. In the interim, seek a qualified designer by vetting a few. There are fewer of us these days. It’ll take time. Isn’t your home worth the wait and some wise consideration? Don’t be a sheeple. Take back control of your home’s destiny. You’ve earned the privilege.
‘Til next time my friends….
