On the surface, it seems like building a house to meet the price requirements of the entry-level buyer would be a game of subtraction. Take a move-up home, pull back on the square footage, cabinetry, and flooring, scale down some finishes, and voilà, you have the entry-level home.
But that’s not how many architects and builders who still work in the entry-level market view things. While there are some builders out there who produce a bare-bones home without basics like appliances, many architects contend that the best way to attack entry-level is to build up to the price point.
Housing Matters: Millennials and the Entry-Level Market
“You have to say, ‘What can I put into this house to make it terrific at the price point that I want to sell it at,’ not, ‘What do I have to take out of it to get it down,’” says Elise Platt, president of New York-based strategic planning and marketing consulting firm E.A. Platt & Co.
To start that process, Marianne Cusato, a Miami-based designer, says architects and builders need to start with the “must haves.”
“Rather than eliminating elements to make a home more affordable, I would start with a list of items that are most important,” Cusato says. “Ceiling heights and windows matter because these elements make a space livable. If I’m designing a small home, I start with 9-foot ceilings and 5-foot, 6-inch windows. If I can get those two things, I know the character of space is fantastic.”
Platt prioritizes things that can’t be removed. “You can’t sacrifice light,” she says. “My edict is always give them what they can’t go back and fix. They can’t go back later and fix windows. They can’t go back and fix a nice staircase and entrance. But they can go back and put hardware in or granite countertops.”
But some builders contend that the millennial segment—today’s primary entry-level buying market—doesn’t necessarily want to give up granite countertops and the nicer finishes with which they’ve grown accustomed.
“It’s hard,” says Matt Riley, director of sales and marketing at Raleigh, N.C.–based Royal Oaks Building Group. “The expectation of what a customer thinks should be in a house at that entry-level price point is kind of crazy. The expectation of the buyer has gone up significantly.
He blames one culprit. “I think a lot of that has to do with people being used to the features in newer apartment complexes,” Riley says.
But just because it’s hard to design the entry-level home doesn’t mean it’s a lost cause. “It will become the bread and butter of housing stock,” Cusato says. “Entry-level homes serve a crucial demographic, which makes it even more important to build homes that are livable and not just seen as a disposable item the owner moves away from as soon as possible.”
Getting there is hard, though. To produce an affordable, entry-level home, architects and builders must apply creative solutions to seemingly insurmountable problems like rising land costs, burdensome entitlement fees, and unrealistic millennial tastes. Here are five places architects say money can be saved with conventional and highly adventurous approaches.
1. Porches and Exterior Components
Cusato is a strict adherent to the tenant that the simplest solution is usually the best solution. “In itself, simplicity can be beautiful,” she says.
On the exterior of a home, simplicity isn’t just beautiful—it can save money, especially if you eliminate “gratuitous” design features that look bad and add cost. “The window boxes and the 3-foot porch add no value,” she says. “It’s only a drag. When you add in all of these extra things you lose authenticity. You’re trying to make it look great, but you’re actually making it look worse.”
Even features that typically are considered nice may not be necessary on an affordable home. “If you’re going to do a beautiful bay window, go for it,” Cusato says. “But the reality is if you’re doing affordable housing, there is probably not the budget to get the details right.”
Cusato also suggests cutting bay windows on the garage, small shutters, small patches of stone and brick, and turrets. But she has a special disdain for small porches. “It’s better to have a nice door surround than a porch that’s 3 feet because a porch that’s 3 feet is a joke,” she says. “If you have a front porch, make sure it’s 8 feet or take it off.”
Others agree. “Decorative porches are aesthetic and very costly,” says Nick Lehnert, executive director of Irvine, Calif.–based KTGY Group.
With a top-down approach, Cusato contends that builders can save a lot of money. “A lot of times houses get off target because people have started with a floor plan and they have to put a lid on it,” she says. “The volumes don’t add up. The result of that is the tail wagging the dog. Instead, you design from a roof down.”
Designing from the floor plan up and forgetting about the roof plan until the end of the design process introduces issues that all have one thing in common—they add cost. It makes the drawing process difficult and it can be complicated to build. It also creates the opportunity for leaking and failures over time, and these bulky roofs aren’t very attractive, either.
“The result is a very heavy hat [roof] with lots of gables or a giant hip roof with the little ridge on top,” Cusato says. “That is the result of a floor plan that wasn’t thought out.”
Larger roofs also produce another problem that might have a long-term impact on the entry-level buyer’s wallet. A larger room means there’s more room for air to sit in the attic, resulting in “a huge volume of hot sir sitting above the house in hot months and cold air in the winter months,” Cusato says. “If you insulate at the ceiling, your mechanical systems have to compensate for an enormous volume of air in these large attics.”
That’s why it’s easier to start the design with the roof. “If you can keep the floor plan simple and straightforward then you’re able to have a roof that is easy to build, efficient to maintain, and looks great,” Cusato says.
When you’re looking to cut costs, the kitchen is always a good place to start. “The biggest costs are kitchen and baths,” Lehnert says. “You can do things to minimize costs in the kitchen.”
Cutting back on the size of the kitchen means going with smaller cabinets and countertops. And, with the right design, small kitchens can still be very nice.
While there’s debate about how much millennials really want to give up, some architects make the case that builders can save money on kitchen features and still attract entry-level buyers. “In that marketplace there’s not one human who cares about the brand of their sink,” Platt says.
Cusato is a fan of Formica instead of more expensive countertops, and when mixing it with a good overmount sink, it can be a solid, cost-effective alternative to the granite millennials are said to prefer. “The problem with Formica has been the sinks have always been really gross so everything is kind of cheap,” she says. “Formica is amazing. They have great new product lines. I love them. Kohler offers an overmount sink that has a flat edge rather than the conventional raised profile. This allows you to sweep crumbs directly into the sink similar to an undermounted sink.”
Ultimately, countertops and other kitchen finishes can be upgraded later. “The finishes need to be clean and simple, then update as you can,” Cusato says.
4. Open Floor Plans
When architects design entry level in expensive markets, they’re often dealing with space constraints. One way to attack that is with open floor plans.
Not only are open floor plans en vogue, but they also eliminate hallways, which in turn saves on drywall, trim, and other materials.
“Open living helps because it’s annoying to spend square feet in a hallway,” Platt says. “Now you don’t have to do that and people have come to expect open living plans.”
Cusato agrees. “Why waste space just for circulation?” she says. “Then the trick becomes, how do you keep it private? You’re looking to make sure that if you minimize, then within how the space is designed, you make sure bedrooms are separated by closets so you have sound insulation between them.”
John Thatch, principal and director of design at the Pleasanton, Calif.–based architectural and planning firm Dahlin Group, has found other ways to add flexibility to open spaces. “We started looking at doing barn doors and looking at different ways to take this [open] plan and use it in more ways,” he says.
But Cusato warns builders: “Don’t open things up too much,” she says. “A lot of those floor plans got so large that you can’t have a private conversation. The difficult balance to thread here is saving money at a point where you still make the home lovable and livable.”
5. Unfinished Bedrooms
When Bill Warwick thinks about aging in place, he’s not talking about seniors housing. A principal with Philadelphia-based BartonPartners Architects Planners, Warwick thinks builders and architects can build a cost-effective house that entry-level buyers can grow into as their needs change, while also cutting costs.
His idea: Build the home, but leave some bedrooms and other spaces unfinished. Warwick envisions a bedroom (and even bathrooms) with rough mechanical duct work devoid of paint, fixtures, flooring, trim, and finished closets. “It’s a raw, unfinished space,” he explains.
But it’s also less up-front cost to the buyer. “It’s all of the other stuff—painting, finishing, carpeting—that adds more cost,” he says.
And, for a childless couple in their late 20s, there’s no need to pay for the extra bedrooms to be finished. “Realistically, they don’t have to finish out the additional bedrooms until they have a need for it and start having kids,” Warwick says. “It’s a way to get someone in a home that doesn’t need all of that space today. In three years, they may need it.”