John Rausch on Housing Affordability & the Future of Development

John Rausch (Michael Woods)

John R. Rausch is chairman & CEO of The Rausch Cos. Rausch is a Fort Smith native who built Rausch Coleman Homes into one of the largest homebuilding companies in the U.S. before selling it this year. He continues to lead The Rausch Cos., a family holding company that includes, among other entities, The Calara Group, a real estate development company.

Rausch received a bachelor’s in business administration from Southern Methodist University.

How did the deal with Lennar come together and why did you ultimately decide to sell?

When we were approached last year, it was unexpected, not planned. Yet the more we talked about it, we believed we were being called to this decision. It was not easy, but we recognized the offer as a good opportunity to sell the homebuilding business and ensure our people had a great landing spot, while providing opportunity for land development and other real estate ventures in the future.

Where will The Rausch Cos.’ focus shift with the sale of Rausch Coleman Homes?

We will continue to diversify our portfolio as we have done over the last two decades. While our businesses serve different industries, they have a steadfast common thread in our mission: Improving quality of life one community at a time. And our focus will never change in terms of ensuring we honor God in all we do.

What can cities do to increase the supply of housing for the first-time buyer?

Density! The cities need to be proactive in approving zoning for higher density communities. This would not only increase the housing supply, but it would also bring down the price of homes, making housing more affordable. Easily, density is the biggest regulatory issue in the housing crisis.

How have first-time homebuyers’ preferences changed in recent years?

First-time homebuyer decisions show that value and functionality are the priorities for their homes. They are more focused on the layout of the internal space than they are on external features. Open kitchen and living spaces that promote entertaining and split bedroom plans allowing privacy are important. As housing costs continue to rise, buyer preferences will continue to change.

How will tariffs affect residential construction and real estate development?

New tariffs may cause an increase in prices, but this is more than overshadowed by other regulatory rules that have a more significant impact on affordability. The cost of regulations prior to new tariffs accounts for about 25% of the price of a home. Some regulations are necessary for health and safety, but there are many more that are arbitrary. A true affordability overhaul should focus on minimizing unnecessary burdens within our existing regulatory structure.