Argument: growing income inequality reflected in “unseemly” larger houses

In his new book, Charles Murray (not a sociologist) apparently makes the case that the “unseemly” big houses in the American suburbs today reflect growing levels of income inequality:

He begins by noting that the distribution of income was far more compressed in 1963 than it is today. Back then, the median family income of professionals and managerial occupations was only about $62,000 p.a. in today’s dollars. Less than 1% of American families in 1963 had incomes higher than $200,000 p.a. and only 8% had household incomes higher than $100,000 p.a. (again, all figures in today’s dollars).

The housing of the time reflected the same degree of compression. Even the elite didn’t usually live in what we think of today as a mansion. He recommends viewing an episode of Mad Men to see the sort of house – remarkably modest by today’s standards – that the Drapers live in. That, he says, is “the kind of house that the creative director of a major New York advertising agency might well have lived in”.

In 1963, great mansions were something most Americans saw in the movies, not in person. Only the richest suburbs of New York, Chicago, and Los Angeles had entire neighborhoods consisting of mansions.

The nature of the change since then can be seen by driving around suburban neighborhoods where the affluent of the 1960s lived, such as Chevy Chase, Maryland; Belmont, Massachusetts; or Shaker Heights, Ohio.

Most of the housing stock remaining from that era looks nothing like the 15,000- and 20,000-square-foot homes built in affluent suburbs over the last few decades. No reproductions of French châteaux. No tennis courts. No three-story cathedral ceilings.

Interesting argument. I wonder if some other factors might also be at play here.

(1) Perhaps people today are more willing to spend their wealth on impressive houses. This could be the case if homes have become more important markers of status since the 1960s.

(2) Perhaps home builders weren’t building these types of homes on a large enough scale for more wealthy Americans to access them. The early 1960s is not that far removed from the under 1,000 square feet Levittown houses and the big builders (as opposed to more local or regional builders) were just taking off. In other words, there was no Toll Brothers yet. Additionally, you need lenders who would be willing to service more mortgages for bigger houses.

(3) Overall, all American homes increased in size over this time period. The average square footage of a new home was 1,660 square feet in 1973 and peaked at 2,521 square feet in 2007. It could be true that the top 10 or 20% of houses have really increased in size but on the whole, all new homes have gotten bigger.

(4) Another factor that might be overlooked here is that the wealthy in the 1960s tended to live with other wealthy people in suburbs or subdivisions and this is likely still the case today. Sure, Don Draper might have had a smaller home but Draper still lived with white-collar professionals. Even if their house sizes have really ballooned, one issue is that the wealthy still live apart from other Americans. Perhaps we should be more concerned with residential segregation than just the size of homes.

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