Tax and Incentive in Construction

[Dan DiFilippo]

This is an exploration of theory here, not much to do with investing. But I would love your guys thoughts. Bear with me because it's a bit strange.

I'm in Fayetteville, NC. Excellent investors' market, wild cash flow, definitely happy to be here. As many of you like know, ranch homes are the most expensive to build. This has to do with the roof and the foundation being the most expensive components of a structure. In many cases, CapEx like roof and HVAC can be a tremendous expense in relation to rent. This is especially true in this market in which gross rents for a decent SFR might be about $1,000/month. Now such a home will likely be a ~1,400sqft ranch in an okay neighborhood. And the fact that it's a ranch essentially makes it less energy efficient and also more roof per living space than, say, an 1,800sqft 2 story home. But popular booms throughout the 60's, and 70's, and even the 80's saw a whole ton of ranches thrown up to accommodate small families. I think in many cases, the construction of these ranches was ultimately a disservice to the long-term social good. I wonder if somehow a property tax credit to houses built with more square footage off of ground level or by some calculus that benefits the use of levels would move us away from ranches somewhat.

[Natalie Kolodij]

Where do you want all the people with small kids, seniors, and disabled people to live? 

People love ranch homes and many people can't use stairs.