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Whatever Happened to the Starter Home?

September 30, 2022 by Nicole Mason

Whatever Happened to the Starter Home?

The economics of the housing market, and the local rules that shape it, have squeezed out entry-level homes.

The American starter home has been a bungalow, a shotgun house, a rowhome.Credit…Library of Congress

Emily Badger likes talking to home builders about economics and to historians about architecture. She’s done that at The Times since 2016.

As recently as the 1990s, when Jason Nageli started off, the home-building industry was still constructing what real-estate ads would brightly call the “starter home.” In the Denver area, he sold newly built two-story houses with three bedrooms in 1,400 square feet or less.

The price: $99,000 to $125,000, or around $200,000 in today’s dollars.

That house would be in tremendous demand today. But few builders construct anything like it anymore. And you couldn’t buy those Denver area homes built 25 years ago at an entry-level price today, either. They go for half a million dollars.

The disappearance of such affordable homes is central to the American housing crisis. The nation has a deepening shortage of housing. But, more specifically, there isn’t enough of this housing: small, no-frills homes that would give a family new to the country or a young couple with student debt a foothold to build equity.

The affordable end of the market has been squeezed from every side. Land costs have risen steeply in booming parts of the country. Construction materials and government fees have become more expensive. And communities nationwide are far more prescriptive today than decades ago about what housing should look like and how big it must be. Some ban vinyl siding. Others require two-car garages. Nearly all make it difficult to build the kind of home that could sell for $200,000 today.

“It’s just become where you can’t get to that number anymore,” said Mr. Nageli, now the operations manager for the Utah builder Holmes Homes.

Nationwide, the small detached house has all but vanished from new construction. Only about 8 percent of new single-family homes today are 1,400 square feet or less. In the 1940s, according to CoreLogic, nearly 70 percent of new houses were that small.

Those starter homes came in all kinds over the years: mill worker’s cottages, shotgun homes, bungalows, ramblers, split-levels, two-bedroom tract homes. American families also found their start in brick rowhouses, cozy duplexes and triple-deckers.

But the economics of the housing market — and the local rules that shape it — have dictated today that many small homes are replaced by McMansions, or that their moderate-income residents are replaced by wealthier ones. (A little 1948 Levittown house on Long Island, the prototypical postwar suburban starter home, now goes with a few updates for $550,000.)

At the root is the math problem of putting — or keeping — a low-cost home on increasingly pricey land.

The typical new home has grown…

…as the typical household has shrunk.



2,200 square feet



















Sources: CoreLogic Public Records; U.S. Census Bureau

These shifts may force communities, builders and buyers to rethink what a starter home looks like. In places where even small single-family houses are out of reach for many, the answer might be a condo.

Today in some parts of the country there is hardly anything on the market for under $300,000 resembling the American starter home of the last 70 years. In Raleigh, N.C., entering this weekend there were 17 such single-family homes with at least two bedrooms listed for sale. Across the Denver metro, there were six; around Salt Lake City, three.

In Houston, Felecia Ellis has been driving around on lunch breaks from a dental clinic looking for such a home in the $200,000-$250,000 range.

“Driving through a neighborhood, I’m like, ‘Oh my god, this is a beautiful home, I know I can afford it,’” Ms. Ellis said. Then she pulls out her phone in the hopeful ritual of the first-time home buyer. The answer in the listing, more often than not, is that, in fact, she can’t afford it.

“And I’m like, ‘You’ve got to be kidding me,’” she said. “‘This house is $425,000.’”

The starter home has always done a lot of work. It builds equity, creates stability, gives shelter from landlords and inflation. It has been an incubator of small businesses and community institutions like day care centers. And in an earlier form and time, it was more adaptable. Just add a bathroom when indoor plumbing arrived, a second unit to collect rental income, a garage once cars became common.

“It’s flexible, it’s malleable, and it allows for improvement, investment and change over time,” said Marta Gutman, dean of the City College of New York’s Spitzer School of Architecture.

In the early 20th century, communities were effectively using all kinds of models to solve for affordable, entry-level housing. But the arrival of the car enabled people to move further out, and new planning ideas declared what would be built there.

“That allowed us to say, ‘Forget all those other typologies — a starter home is going to be a two-bedroom detached house on a 7,500-square-foot lot,’” said Nolan Gray, the research director at California YIMBY, as in the opposite of NIMBY.

Small houses, once ubiquitous, are rarely built today.Credit…Library of Congress

For a long time, that suburban model worked, although only for white families at first. But the economics and the politics shifted as the land within a reasonable driving distance of downtown filled in.

Land grew more expensive. But communities didn’t respond by allowing housing on smaller pieces of it. They broadly did the opposite, ratcheting up rules that ensured builders couldn’t construct smaller, more affordable homes. They required pricier materials and minimum home sizes. They wanted architectural flourishes, not flat facades.

“Local communities in the last 30 to 40 years have gotten really good at this — way better than they used to be,” Joseph Gyourko, a professor at the Wharton School of Business, said of rules that restrict development that neighbors don’t like.

This mix of good intentions (energy efficiency, tree preservation) and exclusionary ones (aesthetic mandates, minimum lot sizes) has pushed up the cost of building on top of the rising cost of land. Cities have also shifted more of the burden for funding public infrastructure like parks and sewer systems off taxpayers and onto homebuilders.

The result today is that a builder who can put up only one home on an expensive piece of land will construct a large, expensive one.

A version of this article appears in print on Sept. 25, 2022, Section A, Page 1 of the New York edition with the headline: Looking for a Starter House? Good Luck.. Order Reprints | Today’s Paper | Subscribe

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