From the article, found via the Construction Physics newsletter: The article goes on to detail high-pressure sales tactics, forbidding buyers from engaging their own home inspectors, refusing to...
From the article, found via the Construction Physicsnewsletter:
Their testimonies echo those of thousands of other homeowners who have desperately turned to social media platforms, official government channels, consumer review sites, and local news to demand answers on the construction defects that the companies refuse to acknowledge or address. Common complaints range from water intrusion, truss and joist deficiencies, ventilation problems, and missing or inadequate fireproofing or insulation, to foundation cracks, improper grading, and plumbing issues, many in violation of building codes.
Both D.R. Horton and Lennar promise that their mission to build affordable homes will not come at the cost of quality — even as they have told investors they would cut costs to offset diminishing margins amid a tightening housing market.
“You have to start value-engineering every component of the home, which means making compromises, not in quality, but in the way that you actually configure the homes,” Lennar CEO Stuart Miller said in an interview with Bloomberg Television last year.
D.R. Horton similarly promised its investors it would find ways to cut costs, like “replacing certain high quality fixtures and finishes with less expensive yet still high-quality fixtures and finishes.”
But many avoidable defects are caused by business practices that focus on building and selling quickly, with minimal concern for repeat business or quality control, according to Robert Knowles, president and founder of the National Association of Homeowners and a licensed professional engineer who said he has inspected thousands of new builds.
“There is no bonus for building the house to code, for quality,” Knowles said, to his knowledge. “There’s only bonuses for speed … and volume.” Knowles estimated 100% of all new builds probably have multiple code violations.
The article goes on to detail high-pressure sales tactics, forbidding buyers from engaging their own home inspectors, refusing to document problems within the warranty period, delayed and faulty repairs, forfeiture of tens of thousands in deposits when homebuyers withdraw from contacts over defects that render their purchased home uninhabitable, forced arbitration, etc.
Posting in ~finance because the source, Hunterbrook Media, is sponsored by a hedge fund that trades on its research before publication.
Nonetheless, this is a tale of predatory business that mainstream media sources should be reporting. The tactics described and the oligopoly leverage against consumers are among the Gilded Age historical antecedents that led to the Progressive Era in U.S. politics.
This should give the "just build more housing faster, with fewer regulations" crowd some pause for thought. We do need more housing, faster, but not built by the abusive oligopolists who've carved up the country into regional monopolies of single-family home construction.
With regards to the last line about people who may say build more housing and remove some of the regulations, I think the challenge is that some of these people are buying from these corner...
With regards to the last line about people who may say build more housing and remove some of the regulations, I think the challenge is that some of these people are buying from these corner cutting homebuilders because they probably couldn't afford the same housing from a more quality homebuilder. Which I'm sure there are some out there, but they will cost more and it will likely be a slower build
As with many regulations, they help people who can afford to and ultimately are able to acquire a home, but it's undeniable that they also gatekeep others out of them.
I live in my car right now. In most places I don't think I'm legally even able to buy a piece of land and sleep in my car on that land. So instead I have to work around the system to find ways to exist in my car in less than legal ways sometimes and leech off public and business property in more ways more than I would have to otherwise if I wasn't regulated out of existing some other way.
In my area the only issue you’d have living in your car on land that you own is if anyone sees you dump waste improperly. SE United States, pretty rural area. I worked as a medic around here,...
In my area the only issue you’d have living in your car on land that you own is if anyone sees you dump waste improperly.
SE United States, pretty rural area.
I worked as a medic around here, spent time in a lot of peoples houses, and you would be totally dumbfounded at how some people live, spanning multiple generations. I’m talking mobile home built in the 60s, not maintained, and some poor sod tried to DIY more living space on it 20 years ago and got too drunk to finish. Oh and also full of trash and critters.
So yea don’t dump waste improperly, cause thats what the meth heads do, and no one will bat an eye.
I'm saddened to hear you're in that situation. It's shameful that there's more policing of people who can't afford a roof over their heads than there is of corrupt builders who profiteer from the...
I'm saddened to hear you're in that situation. It's shameful that there's more policing of people who can't afford a roof over their heads than there is of corrupt builders who profiteer from the shortage of affordable housing.
If you're wealthy you're camping or homesteading because you have another address, it's crazy. If you're not on a main road and if you have some trees blocking casual view, and the plot isn't next...
If you're wealthy you're camping or homesteading because you have another address, it's crazy.
If you're not on a main road and if you have some trees blocking casual view, and the plot isn't next to nosey neighbours, it's impossible in a slightly rural area to tell between camping / weekend builder / living in car / no one even there.
What snake_case said: keep your plot visibly tidy, manage wastes on site or off, keep quiet, and you should be invisible.
What a tough choice. Many who can swing it will pay out of pocket for quick fix then flip the home to a greater fool. Home inspectors do NOT do structural or hidden inspection but the real estate...
Many end up paying for the repairs themselves. Others, worried about property value, opt not to pry deeply into the problems and keep quiet.
What a tough choice. Many who can swing it will pay out of pocket for quick fix then flip the home to a greater fool. Home inspectors do NOT do structural or hidden inspection but the real estate industry is keen to keep pretending it does
I always say you can't free market without crazy hard regulations. It's discouraging to see many Canadians clamor for "no red tape!" when they refused to understand building code and why we need inspections and standards.
They need to go back to making small houses. I live in an urban area with houses built in the 1910-1920s and there are still many of them that are tiny little starter homes— true starters, like...
They need to go back to making small houses. I live in an urban area with houses built in the 1910-1920s and there are still many of them that are tiny little starter homes— true starters, like 400-500 square feet, single bedroom. It’s not uncommon here to have the original tiny house later converted to a garage when a bigger house is built later, and some lots just never went through this transformation.
But build smaller houses, without going to “tiny homes”, and build them well.
There has been a more recent history of starter-sized affordable housing — mobile homes, situated on tiny plots in landlord-owned parks. The quality and energy efficiency of mobile homes is its...
There has been a more recent history of starter-sized affordable housing — mobile homes, situated on tiny plots in landlord-owned parks. The quality and energy efficiency of mobile homes is its own problem. They're good for 20 - 30 years maximum, so there's no appreciation over time. The park amenities are substandard. The land rental costs, use restrictions, limited transit options, and transience of occupancy tend to diminish community and concentrate long-term poverty.
I'd love to see more genuine starter homes, but the costs per occupant tend to be higher than for single-family housing, and detached homes don't maximize land use, either. At that point, you're better off building attached dwellings - duplexes, multiplexes, complexes of attached housing so you can keep the most green space around them, and achieve sufficient density for bus routes.
I spent a number of years living in an 800 sq. ft. 2-bedroom in an attached cooperative housing complex, and it was definitely what I would consider quality housing. Mixed income, with about 30% of residents receiving income-indexed rents. There was a large community building, park-like grounds, a decent-sized children's playground, and a bus stop. Costs were comparable to or less than area rental housing. This is what we need to build more of.
I bought a DR Horton home a little over a year ago, knowing about their shoddy practices (why did I insist? Location, location, location). To try to ensure that didn't happen to me, I stopped by...
I bought a DR Horton home a little over a year ago, knowing about their shoddy practices (why did I insist? Location, location, location). To try to ensure that didn't happen to me, I stopped by multiple times a week and walked through the property and frequently was in communication with the building supervisor team. I was a persistent thorn in their side. I had them agree to my inspector prior to the drywall going up, which helped catch a few small issues. I believe my persistence removed most potential problems. I ultimately only had 2 issues:
The dishwasher wasn't level, which lead to a leak which damaged part of the floor about 3 months after closing. With pictures, they were pretty quick to get it resolved (about a week).
A window wasn't installed correctly and became lodged. That was fixed the next day.
My major complaint with them was they let a large percentage of the sod die during construction, so I had them add a written clause during closing with a promise of remediation and it was terrible getting them to schedule anything. Their remediation was not great but I didn't want a pure grass yard anyway and a big bag of clover seed has filled in most of the issues.
DR Horton doesn't really do any of the construction themselves; every part is subcontracted out to local contractors. That can cause a real randomness of quality issues in different areas and even across the street as homes are built. That doesn't excuse DR Horton's shitty policies and poor supervision. Homeowners should have recourse for these builders failing to meet proper standards and there needs to be proper regulation to protect people.
There's a wonderfully snarky and thorough inspector on tiktok / shorts that shows how shoddy these $800K new builds can be. Literally if you think of it, they fucked it up. No underfloor with...
There's a wonderfully snarky and thorough inspector on tiktok / shorts that shows how shoddy these $800K new builds can be.
Literally if you think of it, they fucked it up. No underfloor with tile, cracked joists in the roof(!!), gas leaking at the meters, obviously roof leaks, missing insulation, bathrooms with gaps in the installation, you name it he's seen it and put it up to shame and make people aware of what they may be getting into.
Of course he's gotten sued for pibel a bunch and he always wins because it's literally factual information, so it can't be slander or libel.
The article implies, but doesn't dig into, an underlying corruption of the building inspection system in the locales where these homebuilders operate. I know that in South Florida, a building...
The article implies, but doesn't dig into, an underlying corruption of the building inspection system in the locales where these homebuilders operate. I know that in South Florida, a building inspector extorted us for a bribe to sign off on some basic electrical work for an air conditioner replacement. We also had a friend-of-a-friend relationship with one of the biggest realtors in the county we lived in, and he was able to expedite permit processing in ways that most people don't have access to. He also regaled us with horror stories about the homebuilding industry that sounded like they came from a banana republic and not the ostensibly well-run country we thought we lived in.
I don't know what it's going to take to bring back honest, ethical regulation and governance. We're a long way off the path that made America "great", and a comeback of muckraking journalism would be a good start.
I think that's different from hiring your own inspector when buying a house? Then they're working for you and it's in their interest to point out anything they see. When buying a house in...
I think that's different from hiring your own inspector when buying a house? Then they're working for you and it's in their interest to point out anything they see.
When buying a house in California, there is a lot of paperwork to sign with various disclosures including a home inspection report (paid for by the seller) that's pretty informative. Also warnings about waiving contingencies, one of which is making the purchase contingent on your own inspection.
The contingencies might get waived if you're in a bidding war, though.
I can certainly see how people could be snowed into not getting an inspection despite all the warnings. Not sure what else could be done other than making getting your own inspection legally required.
The cost of getting an inspection is a trivial amount of money compared to buying a house. I don't think it's that sort of regulation that makes the cost of housing go up. Instead it's things like building codes and zoning that reduce supply.
From the article, found via the Construction Physics newsletter:
The article goes on to detail high-pressure sales tactics, forbidding buyers from engaging their own home inspectors, refusing to document problems within the warranty period, delayed and faulty repairs, forfeiture of tens of thousands in deposits when homebuyers withdraw from contacts over defects that render their purchased home uninhabitable, forced arbitration, etc.
Posting in ~finance because the source, Hunterbrook Media, is sponsored by a hedge fund that trades on its research before publication.
Nonetheless, this is a tale of predatory business that mainstream media sources should be reporting. The tactics described and the oligopoly leverage against consumers are among the Gilded Age historical antecedents that led to the Progressive Era in U.S. politics.
This should give the "just build more housing faster, with fewer regulations" crowd some pause for thought. We do need more housing, faster, but not built by the abusive oligopolists who've carved up the country into regional monopolies of single-family home construction.
With regards to the last line about people who may say build more housing and remove some of the regulations, I think the challenge is that some of these people are buying from these corner cutting homebuilders because they probably couldn't afford the same housing from a more quality homebuilder. Which I'm sure there are some out there, but they will cost more and it will likely be a slower build
As with many regulations, they help people who can afford to and ultimately are able to acquire a home, but it's undeniable that they also gatekeep others out of them.
I live in my car right now. In most places I don't think I'm legally even able to buy a piece of land and sleep in my car on that land. So instead I have to work around the system to find ways to exist in my car in less than legal ways sometimes and leech off public and business property in more ways more than I would have to otherwise if I wasn't regulated out of existing some other way.
In my area the only issue you’d have living in your car on land that you own is if anyone sees you dump waste improperly.
SE United States, pretty rural area.
I worked as a medic around here, spent time in a lot of peoples houses, and you would be totally dumbfounded at how some people live, spanning multiple generations. I’m talking mobile home built in the 60s, not maintained, and some poor sod tried to DIY more living space on it 20 years ago and got too drunk to finish. Oh and also full of trash and critters.
So yea don’t dump waste improperly, cause thats what the meth heads do, and no one will bat an eye.
I'm saddened to hear you're in that situation. It's shameful that there's more policing of people who can't afford a roof over their heads than there is of corrupt builders who profiteer from the shortage of affordable housing.
If you're wealthy you're camping or homesteading because you have another address, it's crazy.
If you're not on a main road and if you have some trees blocking casual view, and the plot isn't next to nosey neighbours, it's impossible in a slightly rural area to tell between camping / weekend builder / living in car / no one even there.
What snake_case said: keep your plot visibly tidy, manage wastes on site or off, keep quiet, and you should be invisible.
What a tough choice. Many who can swing it will pay out of pocket for quick fix then flip the home to a greater fool. Home inspectors do NOT do structural or hidden inspection but the real estate industry is keen to keep pretending it does
I always say you can't free market without crazy hard regulations. It's discouraging to see many Canadians clamor for "no red tape!" when they refused to understand building code and why we need inspections and standards.
They need to go back to making small houses. I live in an urban area with houses built in the 1910-1920s and there are still many of them that are tiny little starter homes— true starters, like 400-500 square feet, single bedroom. It’s not uncommon here to have the original tiny house later converted to a garage when a bigger house is built later, and some lots just never went through this transformation.
But build smaller houses, without going to “tiny homes”, and build them well.
There has been a more recent history of starter-sized affordable housing — mobile homes, situated on tiny plots in landlord-owned parks. The quality and energy efficiency of mobile homes is its own problem. They're good for 20 - 30 years maximum, so there's no appreciation over time. The park amenities are substandard. The land rental costs, use restrictions, limited transit options, and transience of occupancy tend to diminish community and concentrate long-term poverty.
I'd love to see more genuine starter homes, but the costs per occupant tend to be higher than for single-family housing, and detached homes don't maximize land use, either. At that point, you're better off building attached dwellings - duplexes, multiplexes, complexes of attached housing so you can keep the most green space around them, and achieve sufficient density for bus routes.
I spent a number of years living in an 800 sq. ft. 2-bedroom in an attached cooperative housing complex, and it was definitely what I would consider quality housing. Mixed income, with about 30% of residents receiving income-indexed rents. There was a large community building, park-like grounds, a decent-sized children's playground, and a bus stop. Costs were comparable to or less than area rental housing. This is what we need to build more of.
I bought a DR Horton home a little over a year ago, knowing about their shoddy practices (why did I insist? Location, location, location). To try to ensure that didn't happen to me, I stopped by multiple times a week and walked through the property and frequently was in communication with the building supervisor team. I was a persistent thorn in their side. I had them agree to my inspector prior to the drywall going up, which helped catch a few small issues. I believe my persistence removed most potential problems. I ultimately only had 2 issues:
My major complaint with them was they let a large percentage of the sod die during construction, so I had them add a written clause during closing with a promise of remediation and it was terrible getting them to schedule anything. Their remediation was not great but I didn't want a pure grass yard anyway and a big bag of clover seed has filled in most of the issues.
DR Horton doesn't really do any of the construction themselves; every part is subcontracted out to local contractors. That can cause a real randomness of quality issues in different areas and even across the street as homes are built. That doesn't excuse DR Horton's shitty policies and poor supervision. Homeowners should have recourse for these builders failing to meet proper standards and there needs to be proper regulation to protect people.
There's a wonderfully snarky and thorough inspector on tiktok / shorts that shows how shoddy these $800K new builds can be.
Literally if you think of it, they fucked it up. No underfloor with tile, cracked joists in the roof(!!), gas leaking at the meters, obviously roof leaks, missing insulation, bathrooms with gaps in the installation, you name it he's seen it and put it up to shame and make people aware of what they may be getting into.
Of course he's gotten sued for pibel a bunch and he always wins because it's literally factual information, so it can't be slander or libel.
The article implies, but doesn't dig into, an underlying corruption of the building inspection system in the locales where these homebuilders operate. I know that in South Florida, a building inspector extorted us for a bribe to sign off on some basic electrical work for an air conditioner replacement. We also had a friend-of-a-friend relationship with one of the biggest realtors in the county we lived in, and he was able to expedite permit processing in ways that most people don't have access to. He also regaled us with horror stories about the homebuilding industry that sounded like they came from a banana republic and not the ostensibly well-run country we thought we lived in.
I don't know what it's going to take to bring back honest, ethical regulation and governance. We're a long way off the path that made America "great", and a comeback of muckraking journalism would be a good start.
I think that's different from hiring your own inspector when buying a house? Then they're working for you and it's in their interest to point out anything they see.
When buying a house in California, there is a lot of paperwork to sign with various disclosures including a home inspection report (paid for by the seller) that's pretty informative. Also warnings about waiving contingencies, one of which is making the purchase contingent on your own inspection.
The contingencies might get waived if you're in a bidding war, though.
I can certainly see how people could be snowed into not getting an inspection despite all the warnings. Not sure what else could be done other than making getting your own inspection legally required.
The cost of getting an inspection is a trivial amount of money compared to buying a house. I don't think it's that sort of regulation that makes the cost of housing go up. Instead it's things like building codes and zoning that reduce supply.