Jim Cromer has wanted to make the jump from apartment renter tohomeowner for about 10 of the past 14 years he has lived in the SanBernardino area of Southern California.
But he could not find a home he could afford in the area, wherehome prices are among the highest in the country.
This month, Cromer's lifestyle finally will change as he movesinto the 4-bedroom, 1,300-square-foot, single-family home he boughtfor $74,000 in the Victory Lane neighborhood of Adelanto, a growingtown some 60 miles northeast of Los Angeles.
His monthly mortgage payment of $556 will be just $30 more amonth than the rent he paid for a 2-bedroom apartment.
"You can't beat this builder," he says, hailing the quality andaffordability of his new home built by INCO Homes of Upland, Calif.
Ira Norris, founder of INCO, is one of a group of buildersthroughout the country who are succeeding in their struggle to buildhigh-quality, low-cost homes. But just as it was difficult forCromer to find such a home to buy, it also is difficult for thesebusiness people to build affordable homes.
Builders say that although there is a ready market for almostany lower-priced home they build, they only can build such houseswhen they can find low-cost land and cooperative municipalgovernments and regulatory agencies.
Norris said that despite the difficulties, his company isconcentrating on building lower-priced homes. It built 672 houses in1992 and probably will complete more than 900 homes this year, hesaid.
In 1990, the average price of the homes INCO sold was $143,000.By 1992, that average price had dropped to $103,000, Norris said.
For him, one of the keys to building affordable homes wasfinding growing desert communities that might still be considered atolerable commute to Los Angeles. Another is taking what he calls "amanufacturer's approach" to building.
"Typically, a builder gives house plans to a plumber and wants aprice for material and labor," Norris said. "But, he's a laborcontractor. We now buy the materials. We have reduced the cost ofsupplies."
In another high-growth area of the country - Atlanta - anotherbuilder succeeded in building high-quality, low-cost homes by buying145 properties in a run-down neighborhood of the city. With the helpof limited property-tax abatements offered by the city to newhomeowners in the neighborhood, Dennis McConnell and Richard Dannerof Intown Homes Inc. attracted enthusiastic buyers for their Oaklandsof Grant Park community.
Houses with 1,200 square feet of space, 2 bedrooms, 2 1/2bathrooms, 2 porches and an enclosed yard sold for about $79,900.
Although Intown prefers building inside the Atlanta city limits,McConnell said government regulation generally makes it difficult andmore expensive to do so.
"It takes 24 separate steps spread over at least three days toget one single-family building permit," he said. A study recentlyconducted by the Home Builders Association of Atlanta showed that an$80,500 house built in an Atlanta suburb would cost $89,900 in thecity just because of the added building costs city regulationsprecipitate.
Bill Edelen, president of Edelen Development in Louisville, Ky.,a company that builds many houses aimed at first-time buyers, agrees.
He said Louisville imposed a $1,000-per-lot assessment on landin one section of the city to help pay to extend water lines. Thatper-lot fee is passed on to buyers and falls more heavily on someonewho can afford only a $90,000 home than someone who can afford tospend $200,000 for a house.
Some low-income Louisville residents recently got a break onhousing prices, however. The Phoenix Hill Association is aiding indevelopment of 13 low-priced houses in that neighborhood.
Because subsidies from the association, along with state andfederal housing agencies, helped keep development costs down,builders there were able to use materials that usually are reservedfor higher-priced homes.
Houses there with just under 1,000 square feet of living spaceare selling for $43,500.
"There was a tremendous demand," says Ray Haines, owners ofAllstate Builders, one of the companies working at the Phoenix Hillneighborhood. "We could have sold 30 or 40 more."
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