Houses built by developers

I am very wary of houses built by developers. I believe my cynicism stems from my having worked in a corporation; I know how corporations think... Let me explain:

Imagine you're a developer, and a particularly dishonest one at that. Being a businessperson, your goal is to make a profit. And since you're a developer, you do this by purchasing land, subdividing it, building houses on the pieces, and selling them.

Of course, developing a sub-division is an expensive endeavor, so to get enough money to buy all that land, build all those roads, followed by hundreds of houses, you borrow lots of money from the bank. Banks charge interest, so you're incented to go from concept to finish in as short a time possible. Thus, you want to build a house very quickly. Ask any builder and they'll tell you what can happen when you rush a job... shoddy workmanship.

While the banks encourage poor construction, the customers practically demand it. As a general rule, people that buy mass-produced developer homes have lower incomes. People with money can afford to hire their own builder for their own custom (or at least modified) design. People with less money go to developers. They are also very penny conscious; a few thousand dollars can be the difference between them buying your house versus another developers. As a result, you too have to be very cost conscious.

Or, in other words, you need to build a house as cheaply as possible while making it look like it cost you a lot of money to build. The result is cost cutting everywhere. You build to code and never above. You use veneers (wood-grain laminates, fake marble, etc.) to make your house look expensive. (Ironically, using veneers to cover low-quality materials costs money, forcing you to cut costs further.) This does not result in a quality product. Your customers know this (or so you tell yourself to shift the blame), but they can't afford anything else. You're doing them a service, since a poorly built house is better than no house at all. And the customers that realize they're buying junk think, "It's only a first house. I'll sell this house in a few years (to some other sucker) and buy a well-built one."

Cost cutting comes in many guises:

• Smaller houses - Of course.
  
• Smaller lots - Not only do you get more houses onto your land, but you save money on roads, sewers, power, and landscaping. Never mind that the smaller lots mean that roofs almost touch and that the house can never be expanded because there isn't enough land.
  
• Build only to code and not an iota more... and if you can get away with it, don't even follow code - After all, the house buyers only see the veneers, not the foundation and structure. Not that they'd know what to look for anyway. (Several people in Darwin have said to me, "But we have private inspectors that ensure a building meets code." 90% of them probably do a really good job at monitoring code. 10% however, are either slack or dishonest. If you're a developer needing to cut costs, do you hire someone from the 90% or the 10%?)
  
• It doesn't matter how much your customers pay in energy bills - They don't think about how much it will cost to heat or cool the house when they're buying, so neither do you. Rely on large air conditioners (to be supplied by the homebuyers) and electric furnaces (cheaper than gas) instead of good design and insulation. This includes using electric hot water heaters instead of solar water heaters.
  
• Similarly, it doesn't matter how much the house costs to maintain - Carpets are more work to clean and have a shorter lifespan than hardwood, but carpets are much cheaper to install.
  
• It can break once the warranty has expired - Install doors, windows, gutters, fixtures, flooring, paint, etc. that are as cheap as possible, but not so cheap that they break while the house is under warranty. The shorter the warranty on the part of the house, the more you cut corners. A foundation can't break for at least 10 or 20 years since that has a long warranty, but paint can begin peeling virtually as soon as the buyers move in.

As a developer you can't afford to have a design that people dislike because it either means wasted money on the design, or even worse, a house that won't sell. Consequently, developer's houses are designed to offend as few people as possible. The way to not offend people is to produce bland, commonly accepted designs. Use neutral colors that won't offend. And never ever go out on a limb. While they don't inspire buyers, it's easier to sell a bland house to an uninspired client than convince them to lay down money for a house they dislike.

Marketing is a must: Sell, sell, sell. Do whatever it takes. Sell to first time home buyers and help them get loans if need be. Sell to real-estate "investors" and guarantee rent if need be. (Don't forget to jack up the price to pay for the loan help and the rent guarantees.) If you're clever you'll twist the real estate verbiage to your needs and call 900 m2 blocks "estates", come up with an expensive sounding name for your development, and use street names like "Madison Avenue" that imply up-scale living.

As we all know, being a developer is a tough dog-eat-dog business. To attract buyers you need to squeeze your margins as low as possible, maybe to the point where you're only planning to make a few thousand dollars per house. No problem; just sell more houses. And if you find yourself in a cash crunch, lower your prices below cost to bring in much-needed money (called deposits and down payments) so you can weather the temporary downturn. This usually works... As well all know, some downturns are less temporary than others, so you might find yourself declaring bankruptcy. No problem; just lay low for a bit and then start up a new company with a radically different name. Think of it as spring cleaning, absolving yourself of all the warranties on the shoddy workmanship and starting out with a clean slate.