Tag Archives: American Dream

“[T]he federal government has backed away from subsidizing homeownership as a pathway to the “American Dream.”

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The recent changes to the American tax code signal a shift toward homeownership:

It may be a few years before experts can accurately assess how the new tax reform law will affect each city’s individual housing market, but one thing is clear: For the first time in a century, the federal government has backed away from subsidizing homeownership as a pathway to the “American Dream.”…

“It’s very hard to come up with how this is helpful to housing,” said Jonathan Miller, President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm “It’s either neutral or negative; there’s no positive, at least that we’re aware of at the moment. All this does is make everything more expensive, at least in high-cost housing markets.”

As a result of the bill, Moody’s Analytics estimates that housing prices will drop about 4 percent nationwide relative to projections in which the law doesn’t exist, and those drops are more pronounced in high-cost housing markets.

A lower sale price is good news, though, right? Not necessarily. Average home prices will drop because of the lowered cap on the MID (from $1 million to $750,000), and a new cap on SALT deductions. These two tax deductions were baked into the price of homes-for-sale, so without them, prices will seem lower. But homeowners and buyers could end up with less mortgage interest to deduct, and a potentially astronomical property tax bill. Previously, there was no cap at all on property tax deductions.

Several things to keep in mind:

  1. The context – the specific address of the residence – matters a lot for this bill. And, local communities and states can respond uniquely to how the changes affect local homeowners.
  2. A lot of urbanists have criticized the subsidies from the federal government for single-family homes and suburbanization. Might these tax code changes help encourage more density in certain locales (and these high-price/high-tax locations are also ones where affordable housing is sorely needed)? Of course, since context matters here, some of those who prefer more sprawl could move to cheaper states where the disappearing SALT deductions matter less. But, isn’t this good for limiting Americans deducting mortgage interest?
  3. Could this help some communities move away from such reliance on property taxes? As one example, some have argued for decades that school funding needs to be more equitable and this is directly tied to property values and taxes: wealthier communities can draw in more tax revenue. (I would argue this is a red herring to as there are bigger issues at work.) Could these federal tax changes encourage more revenue sharing within counties, regions, and states?

Perhaps the best thing to keep in mind is the first sentence of the article quoted above: it could take years to see how this all plays out.

Suburban family downsizes to 1,000 square feet…and then upsizes 412 days later

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Downsizing and tiny houses are supposedly all the rage but they may actually be difficult to pull off as one suburban family attests:

I’d like to say that we had thought about what it would be like to live a tiny life before we downsized from our 4,000-square-foot home, but we fell in love with our little cottage in McKinney, Texas, and had grown tired of living large. Somewhere between the quest for more living space, we lost ourselves in exchange for higher utility bills and weekends spent dusting…

By the standards of tiny living — formally anything under 500 square feet — our move was not a tiny one. But when you consider that we are a family of five (plus a dog), you can see why we called our life “tiny.”…

Every day we learned more about each other and grew less tethered by the norms of privacy. But still, we all secretly longed for a sliver of it, for a private moment where tears could run without an audience, for the chance of living an embarrassing moment on your own, and for conversations that are secret, almost hidden, from the buzz of daily life. It was the togetherness that championed our tiny life, but it was the lack of privacy that also had us questioning it….

All of this joy for 400 extra square feet plus the 12 it takes to house the vacuum. Everyone has a room, everyone has personal space, and no one has to look at the vacuum unless they are using it. We could have added more space, but we purposely kept it small to maintain the togetherness of tiny living and the added bonus of smaller utility bills.

The overriding thought in the decision to add a bit more square footage seems to be privacy: 1,000 square feet was simply not enough. That comes out to about 200 square feet per person but the family desired more. It would be interesting to compare this figure – certainly far below what many Americans have in their dwellings – to global figures as well as to how Americans define and prize privacy. The American Dream with its single-family home is in significant part about having space away from others.

Two other factors in this particular story also strike me as unique. First, the family lives in a warmer climate where being outside is easier. If residents need a little more space, especially kids, going outside is an option. (Granted, being outside in Texas summer may not be pleasant but it is certainly preferable to freezing cold.) Second, the family lives in a suburb that regularly is ranked among the best places to live in the United States. The family does not say much about this in the article but the amenities of such a suburb could ameliorate having a smaller house.

Don’t forget that American residents can collectively help decide what houses mean for Americans

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Kate Wagner of McMansion Hell ends a commentary piece several months ago by arguing Americans need to redefine the meaning of the home:

We need a cultural re-examination of what a home should do for us. Are we building our homes to cater to the communal needs of a family or to accommodate items or signifiers that will impress others? Will a home inspire its inhabitants to spend time with one another or isolate themselves in myriad rooms? Are we building a home to live in, or are we preoccupied with the idea of selling it even before the first brick is laid? Do we want to remodel or redecorate, or do we feel we have to because we’re constantly flooded with content that makes us feel inadequate if we don’t?

It’s time we as space-inhabiters break this unsustainable, unnecessary, and wasteful cultural cycle of consumption and reclaim our homes as our proverbial rocks, the spaces that make us feel safe and content. Who gave industry-funded media like HGTV or Houzz the right to dictate the proper and best ways to inhabit our spaces, to ridicule or diagnose as wrong those of us who lack the desire or the means to constantly consume in precisely way they want us to? A home isn’t an investment vehicle where cash goes in and more cash comes out, or the “After” segment of a television show. A home is, above all, an intimate, personal place; a haven where our intricate lives as human beings unfold. Grey paint be damned.

This names several actors who are defining what Americans want in homes. This includes:

-Media like HGTV.

-The housing industry.

Both certainly have power and influence. The housing industry through the National Association of Home Builders has a powerful lobbying presence. Just see their actions in the latest debates over the mortgage interest deduction. For decades, various media outlets have pushed the image of single-family homes filled with consumer goods; they needs advertisers after all. HGTV has a limited audience but their viewers may be the same upper-middle class Americans that feel like they are not doing well and are very vocal about this.

But these are not the only actors influencing what Americans think of homes. This list should also include:

-The government.

-American residents.

Histories of how the American suburbs developed in addition to overviews of federal housing policy (see this recent example) suggest that federal government in the last century or so is set up to help people obtain homes in the suburbs.

Often missing in these analyses is the role of American residents themselves. What kinds of homes do they truly want? More Marxist analyses suggest Americans have been duped or led into wanting large homes in a capitalist system. Thus, we should help Americans find homes that truly fit their needs rather than mindlessly giving in to what the housing industry and government want them to have. (Wagner’s paragraphs above sound very similar to Sarah Susanka arguments in The Not-So-Big House.) “Re-claim our homes” could involve fighting back against the capitalist system that insists our homes are true markers of who we are (and distracts us from the real issues at hand). In contrast, historian Jon Teaford suggests these sorts of homes are what Americans do truly want because they highly value freedom and individualism. Others like Joel Kotkin have made similar arguments: Americans keep moving to the suburbs because they like them, not because they are forced into them or are not smart enough to fight the system.

Regardless of where these ideas about homes came from (and it includes a mix of institutions as well as ideologies), American residents still have the ability to reject the typical narratives about single-family homes. They do often have options available to them. What kind of home they chose is a very consequential decision. And, perhaps even better, this does not have to be an individual effort or solely about personal empowerment: Americans could collectively vote for candidates and parties that would have a different image of housing. But, oddly enough, housing rarely comes up in national politics and local politics seems full of zoning and housing disputes but few large-scale efforts to provide alternatives. If Americans want housing options to change, they do not have to just turn off HGTV; at both the federal and local level, they should vote accordingly and/or insist that political candidates talk about these issues.

Ideologies and behaviors regarding housing do not just happen: they develop over time and involve a multitude of actors. To have a new vision of housing in America will likely take decades of sustained effort within multiple structures and institutions. These are not new issues; those opposed to McMansions today are related to those opposed to the mass suburbs of the 1950s and to the social reformers of the early decades of the 1900s who promoted public housing. The efforts can be top-down – changes need to be made at the highest levels – but could be more effective if they start at the bottom – with average voters – who demand change of businesses and governments.

Closing the blinds when showing home interiors on HGTV

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I watch my fair share of shows on HGTV and I recently noticed something: many of blinds or shades are closed when the interior of the homes are shown. This could be for multiple reasons:

  1. Lighting issues. Windows can produce glare either from interior or exterior lighting.
  2. The shows may be filming at night. Looking out into blackness is not that appealing.
  3. Blocking off the windows means the show can emphasize the interior and perhaps particularly show new window treatments.

These are good reasons to cover the windows. Yet, it strikes me that taking this action means the private nature of the home is emphasized even more. HGTV homes tend to emphasize the actions of the nuclear family inside the new home. Sometimes, the yard is really important to the homebuyers or homeowners but even then, the exterior is far less important than the interior spaces where it is presumed the family will spend more time.

Additionally, blocking off what is outside the windows ignores one of the most important features of homes: location, location, location. HGTV shows spend little time showing the neighborhood. Again, even when the characters are really tied to a location or neighborhood, this is primarily conveyed verbally and then the rest of the show focuses on interiors. Thus, not only do we not see much of the neighborhood, we also do not always see what the homeowners would see out their own windows.

All of this makes more sense when it is placed into the larger context of the American ideal of a single-family home on its own plot of land inhabited by a nuclear family. This is a powerful ideal, particularly for HGTV’s target demographic.

 

 

“[American] Dream Hoarders”

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A Brookings Institution scholar examines the upper-middle class and how their choices separate themselves from the middle class:

A great, short book by Richard V. Reeves of the Brookings Institution helps to flesh out why these stories provoke such rage. In Dream Hoarders, released this week, Reeves agrees that the 20 percent are not the one percent: The higher you go up the income or wealth distribution, the bigger the gains made in the past three or four decades. Still, the top quintile of earners—those making more than roughly $112,000 a year—have been big beneficiaries of the country’s growth. To make matters worse, this group of Americans engages in a variety of practices that don’t just help their families, but harm the other 80 percent of Americans…

The book traces the way that the upper-middle class has pulled away from the middle class and the poor on five dimensions: income and wealth, educational attainment, family structure, geography, and health and longevity. The top 20 percent of earners might not have seen the kinds of income gains made by the top one percent and America’s billionaires. Still, their wage and investment increases have proven sizable. They dominate the country’s top colleges, sequester themselves in wealthy neighborhoods with excellent public schools and public services, and enjoy healthy bodies and long lives. “It would be an exaggeration to say that the upper-middle class is full of gluten-avoiding, normal-BMI joggers who are only marginally more likely to smoke a cigarette than to hit their children,” Reeves writes. “But it would be just that—an exaggeration, not a fiction.”

They then pass those advantages onto their children, with parents placing a “glass floor” under their kids. They ensure they grow up in nice zip codes, provide social connections that make a difference when entering the labor force, help with internships, aid with tuition and home-buying, and schmooze with college admissions officers. All the while, they support policies and practices that protect their economic position and prevent poorer kids from climbing the income ladder: legacy admissions, the preferential tax treatment of investment income, 529 college savings plans, exclusionary zoning, occupational licensing, and restrictions on the immigration of white-collar professionals.

As a result, America is becoming a class-based society, more like fin-de-siècle England than most would care to admit, Reeves argues. Higher income kids stay up at the sticky top of the income distribution. Lower income kids stay down at the bottom. The one percent have well and truly trounced the 99 percent, but the 20 percent have done their part to immiserate the 80 percent, as well—an arguably more relevant but less recognized class distinction.

The anxiety of being upper middle class: never quite wealthy enough to have all the goods and experiences of the highest group and always striving to stay above the normal/middle people.

Four quick thoughts:

  1. There is a certain lifestyle to be had here. See, my post a few days ago about a healthy lifestyle may have had some merit…
  2. As described here, many of the efforts appear aimed at avoiding downward mobility. In other words, there is some point in income, education, and lifestyle that cannot be crossed going the wrong way. But, there must be people who have this happen through events like losing a job or a major illness. What happens to them? For the “average” upper middle class person, what really are the odds that they would fall down a rung?
  3. There is a suggestion from the author that Americans shouldn’t and/or can’t just ask the 1% to sacrifice; the top 20% need to sacrifice as well. To put it mildly, this would not go over well. Given their anxieties as well as their tendencies to pull up the bridge after crossing the moat, efforts like affordable housing or school integration or significant increases in taxes will be met with opposition. They would use the rhetoric of the middle class – “we worked hard to get here – anyone could do it” – while pushing hard to protect their own status.
  4. Is the ultimate goal of this group to become truly wealthy? Most of them won’t have that opportunity and must know it. Or, is the goal is to simply not be middle class and have some more advantages than most people? Perhaps it really is about the children: is this the group that more than any other tries to give their kids every advantage as a supposed act of sacrifice?

Closing on a house feels like…

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Based on my limited experience and scholarly interests, here are some possibilities for what closing on a house can be:

–Fulfilling the American Dream of homeownership. On the positive side, owning your own property and providing space for a family. On the less positive side, establishing your class status.

-Agreeing to a sizable debt to a large financial institution. On one hand, you probably couldn’t buy that home without a long mortgage (thank goodness for the 30 year loan). On the other hand, you don’t really own your property for a long time and those mortgage payments just keep coming. Overall, a home is going to be the single largest investment/outlay of money for many.

-The end of a complicated process. I’ve seen several surveys suggesting many Americans dislike applying for mortgages (here is one example). It is one of those things in life many people don’t do more than a few times and it often requires a lot of paperwork (both to submit and to read).

-The start of a new era. (1) Even with the mobility of Americans and our relatively low attachment to places, we get used to the physical structures in which we live. (2) A new home often means new social arrangements as we navigate changing families and new neighborhoods and communities.

-Keeping another house occupied. Obviously, no one wants a lot of vacant properties – with lots of discussions of this in recent years involving foreclosures and particular locations like Detroit – but we can push the idea further: just how long will American homes last? Will post-war suburban homes be worth rehabbing when they hit 40-80 years of existence?

-Helping a community continue to exist. With your home purchase, you are making a commitment, if not socially (you could just retreat to the private world of your new home), then at least through your taxes. Even if we put too much emphasis on high population growth as a sign of success, communities can’t afford to lose too many residents and taxpayers.

Should Trump promote a third wave of American suburbanization?

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Walter Russell Mead suggests Donald Trump could help usher in a new wave of suburbanization:

What President-elect Trump has the opportunity to do now is to launch a third great wave of suburbanization, one that can revive the American Dream for the Millennial generation, produce jobs and wealth that can power the American economy, and take advantage of changing technology to create a new wave of optimism and dynamism in American life.

There’s a confluence of trends that make this possible. In the first place, the Millennials, like the Boomers, are a large generation that needs both jobs and affordable homes. Second, the shale revolution means that energy in the United States will likely be relatively abundant and cheap for the foreseeable future. Third, both financial markets and the real economy have recovered from the shock of the financial crisis, and, whatever hiccups and upsets may come their way, are now ready for sustained expansion. Fourth, revolutions in technology (self-driving cars and the internet) make it possible for people to build a third ring of suburbs even farther out from the central cities, where land prices are still low and houses can be affordably built.

For national politicians, this is a huge opportunity. Creating the infrastructure for the third suburban wave—new highways, ring roads and the rest of it for another suburban expansion—will create enormous numbers of jobs. The opportunity for cheap housing in leafy places will allow millions of young people to get a piece of the American Dream. Funding the construction of this infrastructure and these homes gives Wall Street an opportunity to make a lot of money in ways that don’t drive the rest of the country crazy.

This approach meshes very well both with the President-elect’s economic instincts and with the economic interests of the people who voted for him. It also works for the Republican dominated states around the country. It capitalizes on one of America’s distinctive advantages: less densely-populated than other advanced countries, the United States has the elbow room for a new suburban wave.

There are all sorts of fascinating things going on with this argument. Let’s just pick out a few.

To start, this argument suggests Eisenhower and Reagan were great because they helped make the suburbs happen. How much did they do in this regard? By the early 1950s, suburbanization was well underway with a postwar housing shortage and lots of developers and local officials interested in building out. The Federal Highway Act of 1956 certainly helped the process and is often credited for helping urban residents flee cities (even though highways were already under construction in many places). This is a good example of presidents getting credit for things that don’t have much direct control over.

Second, this equates Republicans with suburbs. There are certainly patterns here: suburbanites have tended to vote Republican for a long time (particularly the further out one gets) and both Republicans and Democrats have argued more sprawl leads to more Republicans. At the same time, not every conservative loves suburbs nor does every Democrat love cities. If you had to summarize Republicanism since World War II, would suburbs come to mind or other things?

Third, it sounds like this argument is in favor of government spending to promote a certain way of life. In other words, the federal government should subsidize more suburban growth because it helps generate jobs and housing. While this may fit older images of moderate Republicans (Eisenhower was one, Reagan not so much), it doesn’t fit well with more libertarian/small government Republicans. Why should the government promote certain ways of life?

To conclude, it is clear that all of this requires an optimistic view of suburban life. It is the fulfillment of the American Dream. This is a common American image. Does it match all of reality? Are the suburbs open to all? Would the new spending even further from cities open new opportunities for non-whites, immigrants, and the lower class (who are increasingly in the suburbs) or would it allow whiter, wealthier residents to flee even further from urban problems? What are the environmental costs of another ring of suburbia? What does it do to civic life to continue to promote automobile driven culture (even if those self-driving cars are safer and more environmentally friendly)? These are not easy questions to answer even if many Americans would enjoy a third wave of suburbanization.

Whether driverless cars will benefit suburbs or cities

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Some are wondering what kinds of places will benefit most from driverless cars:

Two op-eds published Thursday make the case one way and the other for the driverless car and the American settlement. In Bloomberg View, the economist Tyler Cowen argues that new technology—not just cars, but also virtual reality and the Internet of Things—has advantages that favor the suburbs. In the Wall Street Journal, Uber CEO Travis Kalanick posits that new technology will create “a more livable and less congested” city.

Cohen’s argument is in some ways convincing. He’s right that driverless cars and on-demand delivery could bring perks to the suburbs—a commute spent reading a book, say, or the quick purchase of that one-percent pint—that have traditionally belonged to urbanites. It’s also true that new technologies, like a smart home heating system, are more readily installed in the modern, spacious suburban home than the older urban apartment. (Ask a New Yorker if she’s ever had a garbage disposal.)…

But Kalanick makes a great point in his piece: autonomous transportation is actually the less important component in creating “a city that lives and breathes more easily.” The more important concept is… sharing. Not the bullshit low-paid menial labor that has long characterized the sharing economy, but actual sharing, where two people get in the same car together.

The most radical future is one where self-driving cars are shared, both on a single trip and between trips. A slightly less radical future is one in which individuals are willing to use a car someone else has just used, but prefer to ride alone.

All interesting points. But, I have two larger concerns with either argument:

  1. What if driverless cars allow both suburbs and cities to thrive? In other words, it would allow some to live outside major cities and others to further enjoy city life.
  2. Point #1 is connected to another: transportation technology alone does not dictate choices about where people live and work. It can certainly open up new possibilities. But, the American suburbs in general are not solely the result of the automobile; suburbs were growing before this, partly due to newer technologies like trains and streetcars but also due to solidifying cultural ideas about cities, suburbs, and social life. I could see driverless cars both giving justifications to those who want to live a car-sharing life in the big city while others will make the choice to buy a cheaper yet bigger home further away and let the car handle the longer commute.

It is difficult to make predictions in this case. As the article notes in the final paragraph, regulations and policies could help tilt the scales one way or another. We have seen this before: a variety of policies in the early to mid 1900s helped make suburban living more affordable and palatable to many Americans. The results included white flight, disinvestment in major cities, the creation of new infrastructure such as interstate highways, and the development of the suburban American Dream accessible to many (whites).

“It’s part of the American identity to have a grill”

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This is the final line in a story on grilling. Here are some updates on the American grilling industry:

Grill sales in America are growing only by low single-digit percentages each year, and the market is nearly 20% smaller than it was a decade ago, according to the research firm IBISWorld.

U.S. grill manufacturers — led by Weber-Stephen Products, maker of the iconic Weber grills — also face stiff competition from imports, which now account for 56% of U.S. sales, up from 46% a decade ago, the IBISWorld data show.

Grill sales are closely tied to changes in the U.S. economy, especially the housing industry. So, not surprisingly, the grill business was hammered between 2008 and 2010 when the housing crisis and severe recession took hold…

The Fourth of July is the most popular day of the year for outdoor grilling, with 76% of grill owners planning to fire up their barbecues on the holiday, the HPBA says. Those summer bookends, Memorial Day and Labor Day, tied for second place at 62%…

And in the heated debate between gas and charcoal, gas has the edge. Gas grills outsold charcoal grills, 57.7% to 40.1%. The remaining 2.2% of grills sold were electric.

Based on this article, then grilling is tied to the single-family home, the lawn and backyard, eating meat, and American holidays. Perhaps it is a symbol of having the leisure time to cook slowly outside. We can add the grill – perhaps the distinctive Weber grill in particular – to other consumer goods that supposedly symbolize the American Dream (McMansions, SUVs, large sodas, fast food, big TVs, etc.).

Yet, other people in the world use grills or outdoor cooking spaces. Are Americans really that unique in this regard? Bon Appetit takes a look at grilling around the world after this introduction:

For Americans, firing up the Weber and grilling up some meat has a distinctly patriotic vibe–we barbecue on the 4th of July, after all, and no image of the American Dream would be complete without a cookout-friendly lawn behind that white picket fence–but we’re not the only ones who pride ourselves on our skill with charcoal and tongs. From satay in Singapore to asado in Argentina, there’s a whole world of grilling out there. You can always find regional variations from city to city, town to town, and family to family, but here are some of the world’s great grilling traditions.

So, perhaps Americans just do the grilling in distinct ways: often in private spaces (backyards of owned homes) at particular times (summer holidays).

The common uniformity of prison and suburban design

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In A Burglar’s Guide to the City, a reformed bank robber describes a realization he had while walking through the suburbs of southern California:

For Loya, linguist George Lakoff’s book Metaphors We Live By took an unexpected spatial resonance, revealing ways in which the built environment could be read or understood as a series of metaphors or signs. He said that after being released from prison, he spent a lot of time taking long walks around the suburban landscape of Southern California. He began noticing that every twenty-five feet, he would hit a driveway; he’d then walk eight feet across the driveway before hitting another stretch of grass; then another twenty-five feet to the next driveway, and so on, seemingly forever, “and the uniformity of that totally echoed the uniformity of the prison environment,” he said to me, “where I had my cell and my seven feet of wall and then a door. And I remember thinking, ‘Oh my God, man.'” He laughed at the utter despair of it all, having gone from one system of containment to another. How would you get away or escape from this?

This is a common image of suburbs: prisons of conformity and tedium, laid out every twenty-five feet by developers to maximize profits while misguided Americans snap up the properties thinking they have found the American Dream. Yet, sameness in lot size doesn’t necessarily mean sameness in lives. These regular spacing could be a very good sign of a tract neighborhood but even then, the homes – like those in Levittown over the decades – could be altered as various owners put their own mark on the dwellings. Or, the neighborhood could be quite diverse, particularly in older suburbs.

Additionally, prisons are built with very different purposes in mind compared to suburbs. Developers and local officials are not scheming to control people in these homes (except maybe through a capitalistic system that keeps them focused on their own properties and blinded from larger issues). In contrast, prisons are all about surveillance – just think of Bentham’s Panopticon.