Usonian Property Considerations…

A lot has been going on with the progress of our Usonian dreams over the past two weeks.

We found the area we likely want to purchase in and found several properties that are basically lakefront on a bluff and extremely affordable. It is approximately 40 miles from our current location but suitable in the future. However, once we began to research this, the more possible expenses, risks and considerations came up.

1) Conservation Authority.

Because the bluff erodes away at apparently about 1.5 feet per year average (sometimes more, sometimes less) the setback for the house must maintained a safe distance for at least 100 years and more likely 180 years. The current regulation is around 180 to 300 feet depending on the location. Not a problem unless someone builds closer to the bluff and sort of blocks our potential view.

2) Foundation.

I have been speaking with both the local building authorities and a reader of this blog regarding the unknown expenses that may arise from building in this general location. One is the soil. It is considered “fox gravelly loam” which drains very well but you may run into soft spots or high water tables that will add expenses. The other is that in the area, an engineered foundation is required adding yet another expense. We are still considering about 3 foundation methods, piering/suspension foundations, Frank Lloyd Wrights slab on grade method (which I suspect would work well in this situation but apparently is harder to get approved in that area) or standard footer/4 to 5 feet foundation walls. The building authorities told me to consider up to twice the normal footer specs depending on the soil conditions…which add another expense…the soil report. My rough estimates after calling around a bit would be around $50K for a solid foundation which is about double or higher my original estimates. However, the soil is more suitable for a septic bed which can save some of that added cost. This is a significant consideration because we can literally be paying more for those two items than 4 acres of land!

3) Real Estate.

After some preliminary research, not many properties are selling in that area which changes our purchasing strategy. I’ll describe this more in a moment. For now we realized…we can wait a seller out. Not much is moving in the price range we have looked at. In some cases, if the seller does not sell within the next few years, the authorities won’t let them sell it as a building lot…period. So eventually we may be looking at a reverse bidding (more selling) war where the people purchasing the properties and building will begin to be courted by the land owners at the last minute. That my friend is a good bargaining position!

4) Financing.

I spoke to a friend that manages a mortgage department for a major Canadian bank about our financing options again. He basically told me what we heard before…banks do not want to take the risk of financing land because of the lack of potential equity in the land versus a fully built home. In other words, a piece of land is likely harder to sell in the case of a default than a built home.

This falls in line with Frank Lloyd Wright’s comments on the subject which was paraphrased as “Banks don’t finance homes to live in they finance homes to sell”. We have certainly found that in our own lives and were stuck in that thinking before we realized we may build a house we can spend forever in. A very romantic and real notion.

However, my friend had a fantastic idea. Because we are not likely ready to build for about 2 to 3 years time he said take what you would have put into that property in interest and taxes for 3 years and put that amount into an interest baring account each month instead. That way at the end of the 3 years we have a significant down-payment and a private mortgage lender will likely finance that…no problem because they are protected with our 35% down. This allows a better bargaining position all the way around, better rates and lets us wait to see if someone else is building in that area to predict the risks we are going to encounter with the soil and foundation situation (which we found out happened a few miles away). Also, we will have more equity in our current home which we can then refinance to use for building costs on the new property. Made a lot of sense to me because instead of losing money each month, we are gaining in the long run on interest and taxes saved. It is entirely possible to have the entire property paid for in that 3 years which puts us in an amazing situation because then we can build with the equity in land and not touch the equity in our current home. I was stunned at my friend’s thinking because it is a totally Usonian way to do things because at the end of the day, we will be carrying very little debt throughout the process of achieving our Usonian dream!

5 thoughts on “Usonian Property Considerations…

  1. I find your project inspiring, and plan on checking in every so often.
    Perhaps you’ve heard of “Mobius” from New Zealand, and his rather similar project to create a house inspired by Herbert Jacobs I. If so, you likely know that his project was carried through to successful completion. I hope your project goes as well (minus the romantic breakup at the end). Good luck!
    Mobius’s project:

  2. Thanks, Mark! Yes I do remember reading about that one when I first began this journey. It had a very modern/usonian feel to it. I’m going to catch up because i didnt know about the breakup thing. I know building or renovating a home can be super stressful to a relationship.

    I have actually been thinking more and more about why I called it Usonian Dreams and it is literally about taking an idea, changing your whole life and making plans to live that dream. So few people do that.

    What is ironic is my business has huge action on it this year and will likely allow me to pay for the entire house and our future in less than a years time. I think this happens when you align your goals that way. Your work and family should be driving your goals and in this case it is.

  3. I’m glad I’ve stumbled across this site. It looks you are down a path I may start soon. you may get to be my instructor in a very real sense…

    You brought up the aspect of property. I expect it is substantially different in Ontario than it is for me here in Kentucky. But there is one aspect in my considerations you may want to include in yours. Buying a plot with a house on it. I’ve rented a house on a corner of a horse farm here for over a decade. The house is small and far from great, but it is habitable and usable. I am going to see if my landlord will be willing to sell to sell me this corner of less than two acres that the house sits on. If so I’ve thought I’d live in this one while I built the new Usonian. After completing the Usonian, I could then move into it and entirely rebuild the present house structure into a workshop/garage for my vehicle projects.

    I’ve found that financing for me here can be easy and affordable. There is a program with the Department of Agriculture where I qualify to obtain a mortgage for (presently) 2.75% over 15 years with no down payment. It is required that the house be habitable and in an entirely finished state (which my present house is). If I can buy the property for less than $80K US, them I would be paying about the same as my rent in mortgage payments.

    I suppose I might have a couple of things going for me, should I pursue a project like this. In a previous career I designed architectural aluminum systems (windows, curtainwall,, cladding). My brother in law is a building inspector and former contractor, so I have someone knowledgeable to consult with.

    It’s been quite a mental journey figuring out what my first owned home might be. I’ve pondered some sort of ownership for about two years now, but tossed it as I felt it would take a while to get the scratch up for a down payment. Thanks to the USDA, that is no longer a problem. I’d thought of cabins and self-built bungalows I recalled the Usonian house, as my aunt lent me “The Natural House” by Wright while I was in high school- before my unsuccessful stab at architecture school- I feel that is the best choice for me, and my self-construction.

    Anyway I’m subscribing and will be watching with great interest…

  4. Thanks for the comments, Dennis and I certainly wish you well on your journey! I’ll address a few here then maybe more in blog posts as things go along.

    My wife and I have considered what you speak of. Purchasing an existing house with a bit of extra property and it is doable. The problems however are two fold. One is our kids need to finish school in the area they are now and two, MOST areas where this is possible have ecological bureaucracies (that are a nightmare) to deal with. Let me go into number 2 as number 1 is just a matter of timing (we would have to wait either way to move) In some cases you can build another house and tear down the existing house but in most cases, the authorities will not let you do so. In other cases, you can use an existing foundation’s footprint and go I believe 25% more but that opens up the obvious situation, why pay to tear something out and redo it if we can’t live in it while building. The last option would be to park a mobile home on the property while building, but most municipalities here do not allow that. It is a definite conundrum.

    A much smaller Usonian would of course be much cheaper especially if you are building it yourself and if you are able to follow some of Wright’s original concepts as Jacobs place, can be cheap. I would estimate about $70K to $80K in materials for say a 1500 sqft house. Where I would run into issues is more with things such as permits and foundation requirements etc that you likely would not run into.

    Btw, most of the work can be done by a few handy people. I think this is what has been lost on today’s society. When I used to do renovations, I would go to work, renovate, come home and do renovations on my current home. Never had a problem with it and I was healthy enough and energetic enough to do it.

    Let me know how you progress!

  5. Hi Jia: I’ll offer my perspective on bunyig a house and remodeling. I am an architect with a background in construction and a DIY fan as well, so take my comments for what they are worth. When we first looked for a house we slowly realized that we could not afford a house that we aspired to. [We live in a town with fairly expensive real estate.] So we knew we would be looking for places that we would work on over the years. Experience suggests there are four levels of projects: 1. Fix the functional stuff. This would be a house that suits your needs and tastes but needs a new roof or a furnace. These kinds of things should be revealed by a good home inspection and can sometimes be negotiated with the seller.2. Upgrade the finishes. This is a house whose layout you like, but the finishes are past their useful life. Our first house fell into this category, the master bath tile was in terrible shape and had rotted out the framing around it. The shower was akin to a vertical coffin and we took the opportunity to put in a standard tub/shower as well. These kinds of projects are pretty manageable and often can be done over time while you live in the house.3. Needs a structural re-model or addition. These are the projects that get scary from a cost perspective as BUILD so eloquently describes above. Our second house fell into this category. Before we bought the house we had a pretty good idea about how we were going to add on to it, and whether our budget would support it. Mostly these projects fall into the category that you will need to live somewhere else while the work is being done, so don’t forget to include that cost in your budget and remember that these projects often tend to run over schedule.4. The scrape. We live in a town where there are very few buildable vacant lots available, but there are a lot of badly built, worn out houses from the early to mid 60 s. Buying one of these that is a beat up rental can often cost no more than a vacant lot an demo costs are cheap. This way you can build exactly what you want, the construction costs are much easier to predict, but it is the most expensive option.Try to enjoy the process, it can be really fun but it will always take 3 times as much effort on your part as you think it will going in!

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