Regularly I hear about the need for fewer chain stores and restaurants and having more mom & pop local shops. People will call or email asking, “why don’t we have …….”
Our cities are starving for great PLACES!
Sure we have wonderful housing. We have our major grocery stores and restaurants. But we’re all craving that 3rd place in our lives outside of the home or office. We want that place to meet with friends on a weekend to listen to live music or play games. We crave a safe place to just walk around and people watch. We desire iconic places to just sit and relax and enjoy being outside. We want to walk into a store where we know the shop owner and they know us. We’d prefer to eat at a unique local place where the owners’ kids go to school with ours than another chain restaurant. And it’d be great if we could get to those places without needing to get in our car, but just walk up the road.
Here’s the reality. Developers, banks, and builders of today do not build things that typically make great places for our communities. They do not build buildings where a mom & pop store can afford the rent. They do not design places conducive to gathering people together. They certainly are not focused on iconic architecture or passive public spaces. They don’t care what type of vehicular traffic their project makes on the adjacent infrastructure. They are focused on building projects that sell quickly, maximize the monthly building rent, and can be sold and traded as an investment vehicle.
They care about the financial benefits of real estate they own. They do not truly care about how their building or project can be a benefit to the community. They aren’t thinking of how they can integrate into the fabric of the existing neighborhood or create enhanced value for everyone else nearby. They certainly aren’t thinking about how a small local business can open up shop and survive the first few challenging years of owning a new business. They’d prefer a chain or corporate tenant that has the financial backing for a 10+ year lease.
And on paper, all of that makes sense. If you’re taking the financial risk to build a building as an investment, you’re going to make all of the practical choices you need in order to maximize that investment and give you the best and highest possible rate of return for your money.
But that is in contradiction to what you and I, the people that live in these communities, desire. We want those great neighborhoods. We want those great and iconic places. We want a variety of housing types and options for our neighborhoods. We want places within walking distance of our homes. So why don’t we just build them ourselves? We care more about our communities than any major chain or national developer ever will. We know what our cities need more than anyone else does. We know the types of dessert shops, restaurants, diners, music venues, boutiques, homes, and office places that could thrive in our town because we know the people in our town. So maybe we should be the ones that are taking on the building and development in our own neighborhoods and opening the businesses we know will succeed. Maybe in the process we can be the ones that make great places and also see the financial benefits rather than leaving it up to the chain stores and national developers. We should be the ones to build something great.
Example of a Cottage Court with shared open space.
She looked up at me with tears almost filling her eyes and simply asked, “but what about people like me?
I was speaking at an event for young leaders in our community sharing about some of the great work we’ve been doing to bring new employment opportunities, lowering property taxes, bringing in new entertainment venues, improving infrastructure, and providing a variety of housing options across the community.
During the Q&A portion, this young woman in her mid-20’s, single, college educated, employed as an advanced academics teacher in our school district, she wanted to know what efforts or options may someday exist for people like her to actually own real estate within close proximity to where she works and does all of her shopping.
Her question was essentially a statement saying, “I’m good enough to work in this community. I’m good enough to educate the minds of children in this community. I’m certainly good enough to spend sales tax dollars in this community. But I’m not good enough to actually live in this community.” And while teachers across the country are notoriously underpaid for the work they do and the educational attainment levels we expect of them, the starting salaries for teachers in our local school district are significantly higher than every adjacent school district. In fact, this young woman’s salary as a 1st year teacher in our school district of $63,000 is 16% higher than the $54,080 median salary for all Americans between the age of 25-34 according to the most recent Census data.
But she still lives at home with her parents.
Because in my community, the lowest priced home that sold in 2023 was a 2 bedroom/1 bathroom mobile home in need of serious updates and repairs cost $150,000. The lowest priced site built home was a 2 bedroom/2 bathroom home that’s 60 years old with no flooring or appliances and sold for $175,000. The down payment and closing cost requirements, if qualifying for special first time homebuyer programs available, are roughly $8,000-$10,000. The monthly 30 year mortgage payment (including taxes, insurance, and PMI) for such a home is around $1,800/month.
The Federal Department of Housing and Urban Development uses the 30% Rule as a guide to assess home affordability – stating that “a household should spend no more than 30% of its income on housing costs.” With a $63,000 annual income and gross monthly income of $5,250 for this young woman, HUD says her maximum housing costs should be $1,575/month. If she were able to buy the absolute of least expensive homes in our community in 2023, putting the bare minimum cash down, and not make any repairs or updates to the home and just live there in as-is condition, her monthly housing costs would be 34% of her income and by definition qualify as “housing burdened.” Of course this doesn’t consider the inevitable replacement costs of mechanical systems within the home in the future.
To continue the story a little further, $5,250/month is her gross monthly income. There’s still the required pension contributions, federal income taxes (which are higher because she doesn’t have a mortgage interest or property tax deduction), and dental, vision, and health insurance contributions. Her net monthly paycheck is $3,455. She carries no credit card debt and drives a paid off 6 year old vehicle. She does have outstanding student loans that went back into repayment last Fall when the Covid-19 relief payment pause ended. Those payments are $385/month, which is about $125/month less than the national average among her peers.
Were she to buy the absolute least expensive home in our community, after mortgage and student loan payments, she would have roughly $1,270/month for food, clothing, fuel for her car, vehicle maintenance, electricity, water, internet, cell phone, and any entertainment. That doesn’t leave much room to save for when her car inevitably needs replaced or when the water heater or air conditioner break and need repairs. That doesn’t leave room to payoff student loans more aggressively or to invest over and above her pension contributions and doesn’t even consider that she’s a person of faith wanting to tithe 10% of her income to her local church.
So this professional educated teacher working hard within our community earning an above average income for her age and earning more than her peers in surrounding school districts….. still lives at home with her parents.
What about rental options so she could have her own space and sense of independence and start out life on her own as a young adult? Of the 450 leased homes in the North Texas MLS system from 2023, the median home rented in our City was a 4 bed/2 bath home at 1,920 square feet renting for $2,395/month. In fact, out of the 450 home leases signed in 2023, only 15 of those homes were under the $1,575/month range that Housing and Urban Development would recommend to be in line with the 30% rule. 8 of those 15 were actually inside of 1 privately owned apartment building.
What about an apartment? A quick search online shows that the lowest priced apartment in my city is a 1 bed/1 bath for $1,190/month.
We found a winner! For this young professional that works in our community to also live on her own in our community, her available option for her own independence, her own space, and to start life as an adult is in one of the few 1 bedroom apartments that exist in the city. Which is certainly okay and how the vast majority of us also all started out as adults. At this price, she is not rent burdened by HUD standards, but after rent, utilities, student loan payments, and general life necessities it will take her 3-5 years of saving to come up with the bare minimum of down payment options in order to purchase the cheapest of homes nearby – assuming home prices don’t appreciate any more than they already have during that time period. She will most likely be in her 30’s before homeownership will even be a consideration for her. And on her professional teaching salary, even when she reaches that level she’ll likely be considered by HUD as “housing burdened” in her monthly housing expenses.
So she has chosen, for now, to live at home and help her parents pay for food and utilities while she aggressively pays off student loans and builds a savings account for a down payment – and (in her words) “find some rich guy that makes more money than me and can actually afford a house.”
You may think to yourself, particularly if you don’t live in Texas, why not live farther away outside of the city where housing costs are less and commute to work? We are the farther away! This is a suburban community on the Southern edge of the Dallas-Fort Worth Metroplex. In order for the housing price/rent price story to get substantially better and within this young woman’s – and frankly every middle income and low income worker within the whole area – range, you must get more than 30 miles away in any direction. There is no viable public transportation here that connects communities with one another and certainly not out into the suburbs and suburban sprawl communities. You trade housing affordability for 20,000 additional wear and tear miles on a vehicle each year, 2-3 hours a day in a car stuck in traffic, and $3.50/gallon gas that ultimately costs you more than it would paying for rent to live closer to work.
It is no secret. We have a housing crisis. An entire generation is being left behind, unable to enter thriving adulthood and independence. And scarier yet, is an entire majority income demographic in America is beginning to be shut out from being able to live in a place of their own, whether they rent or own. Our teachers, nurses, police officers, firefighters – all of the people we call “Heroes” (particularly if they’re under 30 years old or didn’t already own real estate prior to the last 5-10 years) they are being wholly shut out of communities. But it’s not just them. Restaurant workers, custodial staff, school bus drivers, retail employees including mid and upper level managers, and virtually everyone that earns less than $100,000 in household income are rapidly becoming housing burdened with limited options. If you don’t already own real estate – your future looks scary and overwhelming. And that’s why this young woman looked at me with tears in her eyes. She recognizes the reality she’s faced with.
If you are good enough to work in this community, you are good enough to live here too. That shouldn’t be some earth shattering commentary. The majority of decent humans likely believe that sentiment.
But as you’ve seen, the one viable housing option available today to people like this young teacher that contributes greatly to our community – is a 1 bedroom/1 bathroom apartment that takes up about 23% of her gross monthly income. And, I’m certain that it’s the same in your city as it is in mine, the online forums and public discussions overwhelming express their disproval of any apartment building construction. Community discussions tend to vehemently oppose any residential zoning that is not single family zoning – and even then they don’t want too many of those new homes because of the potential impacts to traffic on the streets and or the checkout line at the grocery store.
To the young woman I met this week and everyone like her, there are solutions and there is hope! And leaders across the nation are beginning to wake up to these possibilities.
Cities – both mine here in Texas and yours in your own community – must unlock the entire book of housing options and let developers, builders, and property owners get to work to drastically increase the supply of those housing options in our communities. Today, in the vast majority of American cities, your options for where you live are either a detached single family home or a large apartment complex. Not everyone wants or needs a single family detached home. Certainly not everyone needs a large lot and large square footage single family detached home. But low maintenance cottage courts with common spaces are a low cost housing option that hasn’t been built anywhere in decades. Manor homes, that look like 1 home but are actually 4 housing units, give an alternate rental option for young adults besides large apartment complexes. Townhomes and Row-homes give ownership opportunities at a significantly lower cost for those seeking low maintenance housing. Accessory Dwelling Units allow young adults to have their independence while giving the property owner a potential new way to make some extra money. ADU’s also allow an older generation to retain their independence while selling their single family home to a new generation of homeowners. Duplexes allow families to own the property where they live while renting out the attached housing unit at an affordable rate and helping to pay down the mortgage. Converting existing underutilized commercial centers into condo units unlocks an entire new housing option and reclaims vacant property. Allowing a coffee shop owner to live in a studio apartment above their shop, or an insurance agent to live in the same place as their office is another option that seldom exists in 2024. We don’t just have to have single family detached homes or massive apartment complexes for homes. There are a large variety of housing options. And if we can unlock them in our communities, these young adults and mid-income workers will finally have a pathway to homes that don’t make them housing burdened and they can move out of their parents home and into thriving productive adulthood.
Because if they’re good enough to work here… if they’re good enough to educate our kids… if they’re good enough to serve in our hospitals… if they’re good enough to spend their sales tax dollars here…. then they are certainly good enough to live here too.
Whether you’re a first time home buyer needing your first mortgage or if you’re an experienced home buyer ready for your next home, knowing how the mortgage process works and how to qualify for a new mortgage is an important first step in the process of buying a home.
You’re obviously not expected to know the various acronyms and details involved in how to qualify for a mortgage, but having some general understanding of the process and expectations will put you in the best financial position for buying a new home. It’ll also simplify the process for you.
Credit scores required for a mortgage
Your credit score is really the starting point that most mortgage lenders look at in determining your mortgage qualification. While credit scores are certainly not an indicator of wealth, they do provide a baseline for lenders to determine your creditworthiness. It’s also the tool that determines all of the other ratios we’ll look at below and the interest rates which you will qualify under.
The higher your credit score, the lower the costs of getting a mortgage and the lower the interest rates will be. For the most part a minimum credit score of 640 is needed, however there are several programs available for home borrowers with credit scores as low as 580.
Income requirements for a mortgage
Your income shows the ability to repay the mortgage. Income combined with credit score make up a large portion of what a mortgage lender look at when qualifying you for a mortgage. Mortgage lenders are looking at your Gross Monthly Income. They prove this income through your W-2’s from your employer, your paycheck stubs from your employer, and your 1040 tax return from the IRS. They’ll also consider other regular income that isn’t salary based like dividends from stocks or company ownership, child support, or other income that is consistent.
Your income is the starting point in mortgage calculations for how much mortgage you can qualify for.
Qualifying limits for a mortgage
Obviously credit scores and income are important pieces in qualifying for a new mortgage. But they are only the starting pieces of the puzzle mortgage lenders look at when issuing a mortgage.
One of the most important pieces is actually your Debt-to-Income ratio (DTI).
This ratio is calculated by adding up all of your current debts like car payments, student loan payments, minimum monthly credit car payments, and other debt payment plus adding in the future estimated mortgage payment. Then you divide that monthly amount by your provable gross monthly income. This will give you a percentage of debt-to-income.
Depending on your credit score, there are different limits for this DTI ratio. The higher your credit score, then the higher your DTI ratio can be and still qualify for a mortgage. But it is fairly typical for the limit to be around 42% maximum as a good rule of thumb. There are circumstances and loan programs that will allow for this ratio to be as high as 50%.
This is process is how mortgage lenders determine how much house you qualify to purchase as a maximum. They start with your provable income, verify the maximum DTI you are allowed to have based on your credit score, and calculate the maximum amount of monthly payments you can have. Then they subtract out your existing debts, which leave them with the maximum monthly mortgage payment.
House Qualifying Limits
Loan-to-Value (LTV) is another important piece of the puzzle that determines several aspects of your qualifying limits. The LTV is the percentage of mortgage you’re borrowing against the value of the property. Your downpayment helps to determine the Loan-to-value.
An FHA mortgage will allow you to have a minimum down payment of 3.5% of the purchase price. While there are conventional programs that have various down payment options starting as low as 0%, the most common minimum down payment percentage allowed on a conventional loan is 5% down.
The LTV is a risk measure for the mortgage lender. The smaller the down payment you have, then the higher the LTV ratio is which means the higher the risk the mortgage lender is taking by issuing you a mortgage. Therefore they price their loan accordingly to the risk they’re taking.
A 20% down loan will have fewer closing costs, lower interest rates, and no Private Mortgage Insurance, whereas a 3.5% down payment will have higher overall costs associated with the mortgage.
These mortgage costs all factor into the estimated monthly mortgage payment, which ultimately carry into your DTI ratio for qualifying. Remember, your DTI ratio has to be under the maximum allowed limit as determined by your credit score and loan program.
How to Estimate a Mortgage Payment
There are 4 pieces to a monthly mortgage payment: Principal, Interest, Taxes, and Insurance. There’s a 5th piece called Private Mortgage Insurance (PMI) if your LTV is higher than 80%.
You can calculate the Principal & Interest (P&I) portion of your payment using any payment calculator. A 30 year loan (360 months) or 15 year loan (180 months) with the total amount of money you plan on borrowing for the mortgage with an average market mortgage rate. This will give you your fixed monthly payment.
Taxes are fairly simple to calculate, although they can be different for each house on the market. The easiest way is to look up the local tax rates and multiply that percentage by the sales price. Divide by 12 and that’ll give you your monthly tax bill. The more specific way is to go to your county website and find the actual tax bill for each property you want to buy and divide the amount by 12.
Homeowners insurance varies by geographic location, company, type of house, age of roof, square footage of house, and price point. It’s difficult to estimate this annual premium without knowing a specific house and receiving a quote. However mortgage lenders in your market can make an educated guess based on their knowledge of recent loans and housing types in the area. You can always ask your mortgage lender or a Realtor in your area how much you should estimate for homeowners insurance. A good rule of thumb is $200/month, knowing that it could be more or less depending on the house and time.
You take these 4 elements, P&I, taxes, and insurance and add them together for your estimated mortgage payment. If you have less than 20% down payment, then you’ll need to also add in an estimated PMI payment (Private Mortgage Insurance). There are calculators online for this and the actual amount will vary depending on LTV, credit score, and overall amount financed. A general guideline would be $130/month knowing that it could be more or less.
How to qualify for a mortgage
These are all of the primary elements that go into mortgage qualifications. A mortgage lender takes your credit score and provable income to start the process and figure out what loan program may work best for you.
They look at your down payment percentage on a specific house to determine the LTV. Based on your credit score and loan-to-value ratio they then are able to calculate mortgage pricing for origination and interest rate costs as well as PMI.
They use all of that information to determine the estimated monthly mortgage payment including taxes, insurance, and PMI.
They then add that new estimated monthly mortgage payment to your existing debts. If the total of those debts divided by your gross monthly income is under the DTI ratio requirement, then you likely qualify for the mortgage.
What options are available if you don’t qualify for the mortgage?
After all of those elements are reviewed, if you come back not qualifying then the mortgage lender reviews each of those individual elements to see where adjustments could be made.
Maybe, your credit score is 714 which gives you a 45% DTI maximum but at a 720 credit score your qualifying DTI maximum would increase to 48% under some circumstances. If you have revolving debt like credit cards that have a high utilization rate, then paying down those credit cards would increase your credit score enough to get into the better pricing bracket.
Maybe you have enough cash available for down payment to get to 20% down instead, which eliminates PMI from your calculations and would get you under the maximum DTI limits.
Maybe there’s other income you forgot to include in your application that would increase your Gross Monthly Income enough to get under the maximum DTI limits.
Maybe you have a retirement account or savings reserves that give you 6+months of reserves the lender can use to increase your qualifying ratios.
There are dozens of different things mortgage lenders can do to adjust and help you in mortgage qualifying.
Should you get a new mortgage?
Just because you may technically qualify for a mortgage doesn’t mean you should rush out to buy a home. There are guidelines out there that would allow you to buy a house where the monthly mortgage payment is 50% of your gross monthly income. There’s not a financial advisor in the world that would say that is a wise decision, even though you could technically qualify for that loan.
Your first step is to make sure your financial house is in order, that you have your consumer debts eliminated or super limited, and that you have enough cash in the bank for a down payment. Then determine how much you personally feel comfortable budgeting each month for your housing costs (20%-33% is a realistic and understandable amount for most families in the US.)
From there, you should meet with a professional Realtor to help you start narrowing in on all of the details in purchasing a home and helping you navigate the process. Your professional agent will have several mortgage lenders that will help you qualify for a mortgage and get the process started. If you’re in the DFW area, our team would love to help you get qualified for a mortgage and buy your new home. Learn more about our team and how we help home buyers here!
We are living through a massive population boom and time period where cities and metro-areas are seeing a surge in people moving inward toward urban centers rather than rural. The reasons are many, including opportunity, education, jobs, healthcare, quality of life, amenities, and affordability as well as changes in economic shifts around the globe.
Whatever the reason, more people are moving into metro-areas and the towns and suburbs on the outskirts are finding themselves right in the middle of the growth explosion.
It is certainly a change and many cities are finding their longtime residents saying, “we want to stay small and keep our hometown feel” even though they probably haven’t been a small town in quite some time.
My hometown of Mansfield, TX is one of such cities. Settled around a new grist mill in the 1850’s, Mansfield has doubled in population every 10-15 years since the 1960’s. It’s located about a 20-30 minute drive from Downtown Dallas, Downtown Fort Worth, and DFW International Airport. It’s a 20 minute drive to a Dallas Cowboys or Texas Rangers game. The city sits in 3 counties at the intersection of a new major toll-road and the longest highway in the United States. Housing prices, even in the craziness of 2022 real estate, start around $200,000 and grow up over $2 million with a median price point around $450,000. Roughly 1,000 new houses are being built and sold each year with an average price of $650,000. In 2000 the population was 28,031, which isn’t a small town by any means. By 2010 the population had doubled to 56,368 and today in 2022 the population of the city is around 80,000. It’s the 3rd largest city in Tarrant County, which is one of the fastest growing counties in the Country, and surrounded by thousands of acres of developable land in other major cities like Grand Prairie, Arlington, and Midlothian, TX.
The reality is, Mansfield, TX is currently a big city that is going to be a really large city and economic powerhouse for the region in the not too distant future. But we also have a tremendous number of people that lived here in 1985-2005 when we were “small” that want to keep that feel.
So how do you keep that small town feel that everyone loves and craves while still being in the middle of a massive population boom toward being a large city?
The Small Town Life
Here’s what I’ve found to be true. We all remember our hometown most fondly from a perspective of our own past. We think about high school and how we knew everyone on campus, or at least those in our social circles. We think about the parties we attended or the community events at a park. We remember the places we hung out as a teenager with our friends after the Friday night football game. We remember helping Mr. Smith get his tractor out of the mud. We remember running up the street to the corner store where we were likely to bump into someone we knew and strike up a conversation. We knew we’d see all of our friends at church on Sunday morning and likely have a potluck for lunch after service. We played sandlot baseball from morning to dusk all Summer with our friends in the vacant field nearby. We met with our neighbors to help clean up litter from downtown. We joined together with others to paint a park bathroom or to build the volunteer fire station. We attended the elementary school play, held a PTA meeting, and fellowshipped with the other families in our kids schools afterward.
Small town life for most of us is remembered from a time period where we were active participants in that small town life. Our schedules were consistent. We did the same thing every day and every week. And we were actively around the same groups of people, often just by happenstance.
But as we’ve grown older – as our small towns have grown into cities – as a new generation has grown into adulthood – and as we’ve each added on other personal responsibilities in this more complex and hurried life we live now in 2022, WE have become less active participants of small town life and become more a consumer of our city. We’ve built entire neighborhoods and communities that allow us to isolate ourselves from each other, park in our garages, never go outside or bump into a neighbor, easily commute out of town for work, and avoid all interaction with anyone else that lives in our community if we don’t want to. The small town life has not left our cities as they have grown larger. We have personally removed ourselves from shaping our communities and as a result left it up to city professionals and a small group of public servants to try and meet our individual needs and desires.
The Disconnect
I regularly hear that phrase, “we want to stay small and keep our hometown feel.” But my personal experience is that I live in a really great place with a really great hometown feel. This disconnect really jumped out to me a few months ago at our annual Volunteer Appreciation Celebration.
Several years ago, rather than constantly issue code violation citations to residents that couldn’t afford repairs to their property, let alone a citation, Mansfield started the Mansfield Volunteer Program to help address these code issues. We partnered with community organizations to solicit help from volunteers and businesses in our community to clean up landscaping, fix broken fences, repair houses, and more. The program was a huge success and has grown to have over 55,000 hours of donated sweat equity annually. We’ve won dozens of awards as a City for this innovative program. Each year we celebrate and honor the volunteers that help make our City great.
As I was shaking hands and passing out awards it became abundantly clear that I know each of these people. They’re the ones that serve on our Boards and Commissions at the City. They’re plugged into their church groups. They serve in other community organizations. I see them weekly in a coffee shop or restaurant. Our kids play sports together. They host their own community events and meetups. It’s the same group of people that are plugged in and actively engaged in our community and we all know each other. We’re all friends. And we all love serving the people of this city together. I get to experience that same small town hometown feel with these people because we’re all active participants in small town life, even though we’re living in a 36 square mile – 80,000 population – fastest growing region in the Country.
But the other thing that jumped out at this event is that those who are most vocal about their negative views of our city – those who are most vocal about wanting to keep our city small and to keep a hometown feel – the ones that push back against every new development for growth or any city initiative for improvement – they were nowhere to be found at the event. They are consumers rather than active participants in shaping a hometown.
Getting Involved in a Small Town Life
I believe any of us can experience a small town life regardless of the size of the city where we choose to live. But it does take being intentional. This doesn’t just happen. You are going to have to make some efforts here to get involved and engage in shaping your hometown. Fortunately, these areas are easy and the opportunity is great! Here are a few ideas to get started:
Engage in your local church: Weekly church services, especially post-pandemic, have become a place where it is easy to be a consumer of church rather than actively involved in serving others. But your church needs help! Volunteer to be a greeter, help in the parking lot, serve in the children’s ministry, chaperone a youth group trip, join a small group or Sunday school class. Your church is also a built in community for you to know and be known. Your pastor can find a way for you to get plugged in to an area of weekly or bi-weekly service and help you connect with others that live in your city.
Become a regular: Go to the same coffeeshop the same day each week. Visit the same local restaurant for lunch on the same day each week. Stop in the local candy store with regular frequency. Get to know the owners. Sit down long enough, frequently enough, and the other regulars will naturally interact with you. “You wanna go where everyone knows your name.” Then go to the same place regularly and interact with those around you and you’ll soon find that to be your reality.
Reach out to your local leaders: You should know your local City Council Members, School Board Members, and if possible your City Manager and Superintendent. These public servants would love nothing more than to find ways for you to engage and serve the community. Their email addresses are typically posted on the school district or City website and they are usually very accessible. These are often the most dedicated people that love your city. They know just about everyone in town and can get you connected to programs, organizations, and resources anytime you may need them. Introduce yourself by email and let them know you’d love to meet them and see if they can help you get plugged into the community.
Join a local community group: You probably have a rotary club or similar in your town. These groups are full of leaders that love to give back to their community. It’s a great opportunity to know others that serve and volunteer to help others.
Serve at a food pantry, clothes closet, or mission center: There are people in your community that have food instability. There are kids in your community that don’t get new clothes at back-to-school time. Someone has to help provide for those needs. Fortunately, your community probably has organizations nearby to help. They just need volunteers to make the logistics work. You can fill that need!
Work where you live: I know that this isn’t always simple as we often move to metro areas because the job opportunities are abundant in the entire region. But as someone who spends 90% of their time within 2 square miles of their home putting few miles on vehicles and wasting time on a commute each day, working in the city where you live is one of the fastest ways to feel connected to your entire community.
Coach your kids sports team: Few people step up in this area, but it’s a great way to create small communities of families that will be together for an extended period of time each week, possibly for years. As the coach, you can help keep that team and group together for years.
Walk Places: This isn’t always easy, because we’ve built neighborhoods in favor of vehicles instead of pedestrians. But when and where possible, you should get out for a walk. Get to know your neighbors. If you can, walk to the corner store a few days a week and engage with the clerk. Walk at the park at the same time each day and you’ll likely bump into other people who are doing the same thing.
Keeping Small Town Life in a Big City
The bottom line here is that YOU can keep small town life regardless of how big the city is where you live. You can make intentional choices to build relationships in your community, serve the people around you, and shrink your own circles so that you regularly are bumping into people you know and shaping the community where you live. If you do this well, it won’t matter how big your city grows or how many people move to town. You will still be able to call it your hometown.
We made a catastrophic mistake in the name of “protecting property values.” We did it too well! Over the last 50+ years or so we’ve slowly and unintentionally made it illegal to live somewhere other than in large single family homes or in luxury apartments.
During that time period we have created entire zoning ordinances that require minimum square footage homes on minimum sized lots with minimum setbacks from neighbors and streets. We’ve prohibited generational living such as building a mother-in-law suite and guest homes are prohibited from having someone occupy them full time. We’ve let HOA’s and municipalities put ordinances in place that restrict our ability to let our aging parents live in a small apartment in our backyard. How crazy!!?!?!
We did all of this just so we could “protect our investment” into our single family neighborhoods by keeping out any other development (and people) that doesn’t look exactly like our own. God forbid someone might allow a newlywed couple to live in an over the garage carriage house while they save for a down payment! The world may literally end if our single family home sits adjacent to a really beautiful duplex where a family owns one unit and rents out the other unit to help offset the cost of their mortgage! I think the sky may actually fall if a quadplex even shares the same air as a Country Club neighborhood.
We have protected property values so well that we now have increasingly expensive single family neighborhoods all over the country. We’ve refused to build anything near those single family homes that doesn’t meet some subjective standard of quality that changes over time. And they’re now getting to the point where homes are flat out of reach for a new generation of homebuyers.
If real estate is one of the best ways to build generational wealth, to break generational poverty, and provide financial stability for families… which I believe it does… then EVERYONE DESERVES THAT OPPORTUNITY!
Accessory Dwelling Units help to solve this home affordability crisis by providing new options for renters and property owners.
An ADU is simply a secondary dwelling unit that is built on a single family lot and occupied/rented by someone else. They’re sometimes called carriage homes, garage apartments, granny flats, mother in law suites, backyard cottages. Sometimes they’re attached to the single family house or even a finished out basement. Other times they’re a detached structure on the side or in the backyard. 150 years ago it was uncommon that anyone but the extremely wealthy could afford a single family home without putting the land to use. It was a sign of extreme wealth to have a front lawn that’s only purpose was to grow grass that had to be mowed every week. The average family had to utilize as much of their land as they could to help financially pay for their home.
ADU’s help average property owners build wealth, but they also provide an affordable home option for a variety of people that live in a community. Maybe your aging parents need a little assistance from time to time and want to maintain their independence without owning their own single family home. Perhaps your college graduate just moved back home while they’re starting out in their first career and can’t quite afford the rent at one of the luxury apartments in town, but wants to be out living on their own. The recent high school graduate that’s working full time in the restaurant around the corner while they figure out what’s next in life likely can’t afford the rent at an apartment complex with tons of amenities, but they also need to be out living on their own instead of with family for whatever reason.
Building Accessory Dwelling Units on your single family property creates unique housing options within your community to address home affordability options while also creating wealth building opportunities for you. It’s literally a win-win scenario.
Yet for the vast majority of single family property owners that live in the United States, they are illegal to build. The zoning in your community most likely doesn’t allow for them. And if the zoning does allow for them and you live in an HOA, then your HOA likely prohibits them.
We could almost overnight change this home affordability conversation. We could create opportunities for you and your neighbors to build a she-shed in the backyard and rent it out for a few hundred dollars each month to someone needing a different housing option. It’d generate income for you as well as help you grow your equity in your property. It’d give someone else in a different life stage than you a housing option other than splitting luxury apartment rent with 3 other people. It’d let new homeowners find ways to generate extra income to help offset the rising mortgage costs.
We can solve this problem. It just takes your local governing body to quit making it illegal for you to build a small apartment for your kids grandmother to live in your backyard.
