Where Are The Builders?
Construction prices are going up 4% or more this year in the Twin Cities. I just read that concrete prices are going up 9% this year. Why? I can only speak from experience. I did 8 years of hardwood floor refinishing, and have remodeled over 20 homes, I just built my first new construction duplex. So I have worked with a lot of contractors and from my perspective I don't think there are a lot of incentives to be a new construction builder.
Personally, I like real estate a lot and as a result I love homes. And since I love homes I want to know how they are built and so I end up loving construction in a lot of way as well. But most people I went to school with didn't become builders. There are a lot of liabilities when you are a builder. You also need to understand building science and construction engineering. You need to know how to build a house and you need to know how to spot problems and also when things are done right. You want to stop problems before they start. In the end, there just isn't a lot of people out there who have that level of experience in construction right now. If I was in charge in Minneapolis I would give anybody that built their own house a $10,000 tax credit. They would need to take a builders course and they would need to build a model that was approved by the city.
The course would be working on a Habitat for Humanity house for a few months. They also would have to interview contractors, create a budget, get insurance, have their sub contractors provide insurance and sign sub contractor agreements. They would need to submit their permit to the city of Minneapolis and get it approved. After all that they would need to create a construction timeline schedule of when work is getting done and who will be doing it. If they did all that and they completed the house on time and they passed all their inspections, then they would get a $10,000 tax credit.