The mass home builder quality problem has a known fix, we just don't apply it to housing

I've seen tons of D.R. Horton, Lennar, or other mass home builder-related posts on here that seem to just say "DR Horton bad" without addressing the actual root of the problem. Having worked in the heavily regulated pharmaceutical industry / GMP manufacturing, It's clear to me that there needs to be some systemic change that incentivizes quality while maintaining quantity.

The main argument against this is that increased costs will be transferred to the buyers when they're looking for affordable housing, and that increased regulations will hurt buyers. I think this is wrong, buyers are already being hurt by the quality issues seen with mass home builders' products. D.R. Horton homes are cheaper than the broader market, however insurers are insuring them as if they will last 30 years. Buyers may end up spending much more on repairs to the crappy homes, and possibly litigation, over the first 5 years of buying a home which they didn't anticipate. With improved regulations, builders will need to rethink how they operate, such as requiring contractors to have certain credentials, be trained and qualified, stay up to date on training, and use materials from qualified suppliers. This may result in a higher initial price of home, however the improved quality will reduce costs over the lifetime of the home. And with a culture centered around continuous improvement, builders will introduce efficiencies and improvements in the building process while staying compliant. I've seen this in the pharmaceutical industry, where companies are constantly looking for ways to improve their processes by reducing cost of goods and turn-around time, in the face of ever-increasing regulatory scrutiny.

Another point I'd like to make is that as it currently stands, the burden of proof for quality issues is on the building inspector and the buyer. This is what the pharmaceutical industry calls "testing quality into the product," which has been proven time and time again to not work. The best processes have quality built into the process at the development stage and throughout the lifecycle of the process, by establishing control ranges for input parameters based on their known effects on critical quality attributes (CQAs). This is basically defining what actually matters for durability and control from day one. I think if this same strategy was applied in the mass home building industry, we'd see vast improvements to buyer satisfaction.

I know there are some issues with this strategy, such as the fact that there is a shortage of 4.7 million homes right now, and millions of buyers need homes today. I think it is imperative that we improve regulations despite this. If this pattern continues, I'd expect these same buyers to have spent the cost of their mortgage on repairs and litigation for a house that is still standing but full of problems. Insurers may raise premiums based on the track record of the builder, and banks will refuse to lend buyers the value of the home because they won't appraise for as much anymore. The quality issues will catch up with the builders, and with current regulations, buyers will be on the hook and the housing crisis will continue.

submitted by /u/Buttpluggery
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source https://www.reddit.com/r/RealEstate/comments/1un8p6v/the_mass_home_builder_quality_problem_has_a_known/