Today, the Wall Street Journal reported that large publicly traded builders are buying up smaller, private builders at a record pace. The end result is the elimination of consumer choice in new construction housing.
The public companies are able to raise cash by issuing bonds. Smaller firms aren't as fortunate. The "mom & pop" builders have always relied on local and regional banks for financing. The economic chasm we've suffered through knocked out more than 400 such lenders. The remaining banks don't seem to have an appetite for new construction housing or land development. Without financing the smaller builders either whither on the vine or decide to throw in with the big guys.
I'm an unabashed proponent of the free market. There is nothing wrong with the big guys taking advantage of their strength and expanding their markets. There is, however, a real need to jumpstart local funding of small builders and developers. Without the "little guys" we won't have custom, or dare I say, even craftsman homes. Consumer choice in new construction housing will be the next thing to whither on the vine.
Small builders bring us custom designs, often higher quality, generally more appealing neighborhoods. They offer innovation in design and workmanship. The "little guy" builds a product designed to stand the test of time not necessarily the test of ultra-efficient construction. You can see the difference when you drive the streets of such neighborhoods. You can feel the difference when you walk the floors of the "little guys" custom home. Often, several years down the road, you can see the difference as time takes it toll on the quick-built production homes. A community like Greensboro needs to add quality, custom homes to our housing stock just to be sure that ten years down the line we don't have a largely poor housing stock.
No doubt there is a place for both types of builders, both types of homes. Sometimes the most square foot for the money is, in fact, the driving consideration.You could certainly argue that if not for production builders we could not hope to keep up with housing demand. My purpose here is to add to the voices pleading with banks to consider their lending practices for small builders and developers. Surely there is profit to be made. We as consumers and a community are best served when there is choice in new construction housing.