In all of the hand-wringing over the lack of “affordable housing” in not only Hancock County, but the state of Maine and the nation as a whole, there is never any discussion of why housing costs have increased so dramatically and become increasingly unaffordable for large segments of society.
It starts with dirt.
Land prices have sharply escalated as our population continues to expand. Yet, to turn the first spade, or backhoe, of dirt for any housing construction we must understand how the basic costs have magnified.
First you need a permit, and more often than not, lots of permits. They cost money (and time) for you, or your contractor, architect or developer. Then the excavation must start and every piece of equipment necessary in the proper site preparation now costs much more than it ever did.
Safety regulations, while well intentioned and often beneficial at large, have taken on a life of their own in the assembly of the tires, the hydraulic hoses, the manufacture of the heavy-metal pieces for the dump trucks and excavators, even the types of paint used to protect the metals. Every nut, bolt and widget manufacturing plant has multiple layers of oversight (costs) built into production — if it’s not from China.
The contractor executing any dirt work has layers of costs too. Increased insurance costs for commercial vehicles due to multiple factors, higher operating costs due to energy policies, ever-rising registration expenses, plus exaggerated regulations for even properly removing dirt from a “quarry operation” (gravel pit) adds expense.
The potential build site probably has restrictions for slope, landscaping, visibility, water control, tree space and/or tree removal options, which will require more experts to become involved. Probably you will need a septic system and a well, too. They have the same truck/equipment issues — plus insurance, operation and liability cost increases. Never mind the demands and higher costs on finding skilled, reliable labor.
You can see where this is going, right? We haven’t even started with the foundation/slab, construction of the walls, windows, and roof, the interior plumbing, wiring and insulation, never mind the physical power-plants and mechanicals necessary for a modern home, all of which reveal ever rising costs. Every single component just plain costs more than ever.
Yes, many modern techniques and technologies have improved the home of today, but streamlined costs are rare — even if you are a capable do-it-yourselfer. The rapid expansion of oversight and regulation in every sector of manufacturing and business in America has fostered a climate of self-fulfilling expansion, creating compounding layers of cost that never get smaller and rarely go away. Home construction is but one example that clearly shows the excesses prevalent in “the system.” Think of it as the law of unintended consequences — on steroids.
Decades ago, starting in the late 1960s, Ellsworth’s West Side neighborhoods grew dozens of single-family homes, constructed primarily by one contractor — Mr. Robert Ray. Reflective of the greater urban expansion sweeping the country as “baby-boomer” families grew everywhere, these small, starter homes were often FHA dwellings that stretched the budgets of buyers, yet afforded the opportunity to start investing in personal property as well as their community. The builder built “spec” houses, and the buyers hoped for financial assistance during an era of higher interest rates (like today).
Later, the creation of Hancock Heights, a planned manufactured housing development, allowed similar goals for retirees and first-time homeowners.
That each of these housing segments still survives, and thrives today, is testament to the ideals of these types of housing options. The owners invested in their community for long-term benefit, for all.
New-home owners or senior citizens needing different housing are both confronted by exorbitant prices that reflect the infallible laws of supply and demand. Will taxpayers need to subsidize start-up homes for a whole generation? Will they want to? Can we afford to with a $30 trillion national debt and continuing high-inflation?
Master Commander Oliver Perry famously stated during the War of 1812, “We have met the enemy, and he is us.” We can point fingers at the high cost of home ownership, but really, we are pointing back at ourselves, as our intrusive government regulation mindset (that government can fix, manage, and control everything with a good outcome) has increased the cost of all consumables in our society — from homes, to cars, to our food and energy. It is unlikely to change and home ownership will remain a mirage for far too many.