Tag Archives: conspicuous consumption

Back to the SUV and McMansion comparisons

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With a stronger economy, it may be time now again to link McMansions and SUVs. Here is one review of “gargantuan SUVs” or “extra-large luxury SUVs”:

But when you drive one like the new 2018 Lincoln Navigator (starting at $73,250), you start to understand why these whales of the highway are a rare yet growing subgenome of the SUV originally created in the heady days of the late ’90s. (Sales were up 5 percent in 2017.) They have become less McMansion, less family trucksters gussied up in questionable leather and wood veneers, and more bespoke luxury condo—the mobile living room for sophisticates with a growing brood that they always tried to be.

Space is a luxury, sure. But the stretch-your-legs-out room and cushy rear-seat experience that would normally require a first-class Emirates ticket? That’s a rare kind of decadence on the road that the Navigator handles with surprising grace. The interior is a treat for grown-ups (copious soundproofing, massage seats) and their kids (it can take up to ten WiFi connections).

Three quick thoughts:

  1. There is still an emphasis on space in these comparisons. SUVs and McMansions both provide significant amounts of room compared to the typical vehicle or home.
  2. Both are luxury goods that are a step up from the normal experience. Yet, the line that these newer SUVs are less McMansion and more luxury condo suggests their opulence is more acceptable. Indeed, it is okay to spend a lot of money for a flashy urban condo while the suburban McMansion is still looked down upon.
  3. Are we sure that the SUV and McMansion are the mass consumer goods that mark this era (roughly late 1990s to now) of American life? To critics, they represent wasted resources as well as American conspicuous consumption. The cell phone becomes popular over this time period but not until the smartphone of the late 2000s does it reach its peak.

I will keep looking for the comparisons of SUVs and McMansions. At the least, they suggest the economy is back to the point where more Americans are making or considering these purchases.

Citing religious reasons to give up a McMansion for a doublewide mobile home

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Even with the criticism of McMansions, I don’t think many would follow the path of this chaplain/columnist to downsize from a McMansion to a mobile home:

The first thing I grappled with was, “Are you living within your means?”

While it sounds like a question from your financial adviser, it really gets at the spiritual issue of greed. If greed prevents you from reducing your spending, you’ll have a problem, since retirement will often cut one’s income nearly in half…

We sold our suburban home and moved into a doublewide mobile home at half the cost of our old two-story McMansion.

As the months passed, the numbers proved workable. Any greedy impulses that remained began to subside. Honestly, it wasn’t that hard to do. We were ready. Our kids were out of the nest and finished with their schooling.

However, we couldn’t have addressed the first question if we had not answered the bigger spiritual question: How much is enough?

While there are plenty of proponents of downsizing, there are two ways that this path is unique:

  1. Downsizing to a mobile home. There are few housing options less liked than McMansions but this would qualify. People think of trailer parks and lower-class residents. They think of dirty homes and lower property values. Often, the discussions of downsizing involve moving to something tasteful and/or customized. The new home may be smaller – wasting less space than the McMansion – but it is not necessarily cheap nor sacrificing much in terms of location and neighbors. For another example, those portrayed on TV as interested in tiny houses are often middle class residents who want a lot of amenities and a calmer life but don’t really want the cheapest housing possible.
  2. The choice is guided by religious values with a wish to live simply in order to avoid greed. Rather than a secular impulse to consume less (for a variety of reasons including environmental concerns, saving money for other desires such as exciting experiences, and avoiding the appearance of conspicuous consumption), this McMansion move gets at an important religious question: how much is enough? I’ve seen very few religious approaches to McMansions. An unwritten stereotype of who owns these places probably puts a lot of southern conservative Protestants into McMansions. But, there are few American religious leaders telling people not to live in places like McMansions, even if they may generally caution people to live too lavishly. (Ironically, McMansions might seem like a good deal then to many religious people because you get a lot of square footage for your money.)

In sum, propose to McMansion critics that we should swap McMansions for doublewides for religious reasons and the idea may not be greeted favorably.

Satire: Hamptons residents tear down McMansions to build mini-mansions

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This is unlikely to happen anytime soon:

The latest thing in the Hamptons are Mini-Mansions. People everywhere are tearing down their 15,000-square-foot McMansions and replacing them with little three-bedroom houses of 2,000 square feet. This trend is unprecedented in America. But here in the Hamptons, it’s the latest craze.

Alice Henderstreep did this. She’s married to the steel magnate Charles Henderstreep and they tore down their McMansion in Quogue for a Mini.

“It’s wonderful,” she said. “Some friends of ours in East Hampton did this. I call my husband, he’s in the next room and comes. We’re never far away from one another. And I love it. The dog runs around underfoot. The kids are in the kitchen. It’s family. And the room we now have on our five acres is just phenomenal. We have huge lawns, we now have tennis courts. The kids have parties in our new pool house. We even built a baseball diamond.”…

“This is the way the original settlers lived,” Fred said when we called. “We followed the plans for a saltbox pictured in the historical museum. And so did the Henderstreeps in Quogue. It’s not like that old split level that was here we tore down for the McMansion. This is a recreation of the early settlers. Hand-hewn beams. Wavy old glass in the windows. It wasn’t cheap. In fact, it cost more than the McMansion we tore down.”

The only way I could imagine this happening is if downsizing becomes the new marker of luxury. It would be the opposite of conspicuous consumption: you can afford to downsize your vacation home and live small for a few days. Or, the tiny house movement could go upscale, perhaps with gratuitous use of innovative yet expensive technology. Of course, such claims might be followed up by a pricey trip to another mini-mansion in another wealthy vacation spot…

A college education as another object of conspicuous consumption?

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A law professor argues the price of a college degree is related to seeing it as part of conspicuous consumption:

More than a century ago, the sociologist Thorstein Veblen coined the term “conspicuous consumption” to describe the practice of buying luxury goods in order to display social status. In its purest form, conspicuous consumption involves purchasing expensive goods precisely because they are expensive, which means that the true conspicuous consumer will have what economists call an inverted demand curve.

Normally, when the price of a good rises, demand for it will fall. Demand for a Veblen good, by contrast, goes up as it becomes more expensive. The purpose of buying it is to display wealth, so the fewer people that can afford to buy a good, the more valuable it becomes to conspicuous consumers…

In economic terms, higher education is a positional good: It is valuable to have a college degree because other people don’t have one. It is also to a significant extent a Veblen good: Sending one’s children to college, and most especially a prestigious (meaning expensive) college, is a way of signaling social status via the conspicuous consumption of a luxury good.

All of this helps explain why college tuition has increased three times faster than the cost of living over the past three decades. University administrators have discovered that, to a remarkable degree, the more they charge for what they’re offering, the more people will want to buy it.

This reminds me of the argument Mitchell Stevens makes in Creating a Class. After a prolonged study of college admissions, Stevens suggests prospective college students tend to select the school they will attend primarily based on status (my note: which is often tied to price). The emphasis is not on learning but rather on the economic benefits this can lead to (better jobs, better social networks) as well as the status the college confers to its graduates.

I encountered a bit of this with my graduate education at the University of Notre Dame. While Notre Dame does not have one of the highest ranked sociology programs, people who heard I was at Notre Dame expressed they were impressed since it is viewed as a good school. The implication was that I must be a good student if Notre Dame thought highly of me – a transfer of status from the university to the individual. However, I suspect their claims were based on the undergraduate ranking (usually between #15-20 in US News) and not on the specific of the sociology graduate program.

Harvard historian addresses McMansions and inequality

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A historian in Harvard’s Business School discusses McMansions and its connections to inequality in an extended conversation here. Some good stuff in this conversation including how top-end consumers are driving the recent comeback of McMansions, a shout-out to sociologist Thorstein Veblen and his idea of “conspicuous consumption,” the idea of a national consumption tax, and how capitalism finds a way to move forward, including creating some inequality.

This is a reminder of the kind of smart and lively conversation that is possible on public radio…

People who waste money purchase McMansions

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McMansions aren’t just critiqued on an architectural level. Another argument is that owners of such homes are not frugal with their money:

As a gift to the institution that gave her so much joy, the former school teacher left $2.5 million to the Council Bluffs Public Library…

Cook supported the library financially throughout her life, thanks in part to money inherited from her parents, who also passed on their love of books and learning to their daughter. As an adult, Cook would stop by after school let out. She taught from 1964 to 1997 at Norris and the now-closed Bancroft Junior Highs in the Omaha Public Schools system. After retirement she spent even more time at the library, volunteering with the Friends of the Library organization…

He said Cook maintained the wealth she inherited through an unassuming lifestyle, spending her money wisely while living in a modest home on the west end of the city.

“She lived frugally. She didn’t have a McMansion,” her attorney said. “She took care of her money.”

In other words, people who buy McMansions spend lavishly. Such homes are testaments to their money, perhaps through their size or bad design. In contrast, people who are good with their money (and can donate big sums to the local library) live in unassuming houses. They don’t feel a need to show off their money with a big, flashy home.

Of course, these are broad generalizations. Cases like these reinforce the idea that not spending on a big house helps lead to more long-term wealth. Someone who had $2.5 million to donate to the local library could have easily afforded a decent-sized McMansion near Omaha and still have had $1.5+ million to donate. I think the idea is that buying a McMansion is a sign of broader spending patterns but this is not necessarily the case. This is a good example of citing McMansions as shorthand for other undesirable behaviors.

“They get McMansions, we get McJobs”

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One columnist suggests McMansions are for the few thriving in the current economy while everyone else gets low-paying jobs:

The Great Recession ended in mid-2009, but for middle class Americans the economic “recovery” never began.

Times will get harder in 2014 for thousands of families in Bucks and Montgomery counties. As reported in this newspaper, long-term unemployment benefits ceased on Saturday for 73,000 Pennsylvanians, about 6,000 of them in the two counties. These people and their dependents will have the penultimate hope ’n change experience – no job, few prospects for full-time work and no unemployment benefits.

The economic news for the majority of Americans has not been good in recent years. However, I’m intrigued by the argument about who McMansions are for. The suggestion here is that McMansions are only for the wealthy, those who have still done well in the economic crisis. Yet, the typical usage of the word McMansion implies that they are big houses for the masses, not just the wealthy. At the economic peak in the early 2000s, the idea of a McMansion meant that a middle-class American could purchase a large and ostentatious home.

At play here is the relative status of McMansion owners. Are they the nouveau riche who are trying to conspicuously present their wealth? Are they the top 10% of the population? The truly wealthy don’t need McMansions – they have mansions – but in times of more scarcity, McMansions might not be for the masses. Also, the article seems to present its criticism of McMansions from those of lower economic and social standing whereas some of the critique of McMansions in recent decades has come from the top in suggesting the owners aren’t really wealthy or don’t have much architectural taste.

New skinny, tall, and super expensive residential towers in NYC

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Here is a look at a new set of skinny, tall, and expensive condo buildings under construction in New York City:

One such apartment tower under construction, 432 Park Avenue, will have a top floor higher than the Empire State Building’s observation deck. Another will have a top floor higher than any in One World Trade Center, which is officially (by virtue of its spire) the nation’s tallest building.

The 432 Park penthouse has sold for $95 million; two duplex apartments at One57, now nearing completion, also are under contract, each for more than $90 million. Even a studio apartment on a lower floor at 432 Park (designed for staff — a maid or butler) costs $1.59 million…

But what’s most striking about these towers is their shape. The boxy old World Trade Center twin towers had a ratio of base width to height of 1-to-7 (209 feet-to-1,368 feet); an apartment house about to begin construction next to the Steinway piano showroom on 57th Street will be a feathery 1-to-23.

That kind of skinniness, also found in skyscrapers in Hong Kong and Dubai, is shifting the focus of high-rise construction. Twenty years ago, only five of the world’s 100 tallest buildings were at least partly residential, compared with 31 today. They include the Princess Tower in Dubai, at 1,358 feet the world’s tallest apartment house.

These towers are shaped by their clientele: a transnational nouveau riche looking for a second (or third or fourth) home. Having made fortunes in nations less regulated economically and less stable politically than the USA, these buyers want a safe investment as much as, or more than, shelter. And they don’t want to pay New York resident income taxes.

Three things I would like to know more about:

1. It would be fascinating to see who lives in these buildings – though buildings like these tend to guard that information. Is this the in form of conspicuous (sort of) consumption: the pricey and incredibly exclusive real-estate holding in the global city? Collect the full set!

2. It would also be interesting to hear more about the construction. A later part of the article mentions “super strong concrete” and new dampers but this is a sizable change from thicker skyscrapers of the past.

3. How do these buildings change the New York City skyline? Does their thinness present a different kind of image?

Why live in Celebration, Florida when you can live in a Disney gated community within the resort?

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Celebration, Florida gets a lot of attention as a Disney-designed New Urbanist community but there are more exclusive Disney housing options: living in a big house within a gated community inside the resort.

Walt Disney Co.’s gated community known as Golden Oak—named after the company’s California ranch—is the only place in the world where you can own a home within Disney-resort boundaries. Some 980 acres are being carved up for as many as 450 homes on the Lake Buena Vista site, a few within eyesight of the famous Cinderella Castle fireworks.

Homeownership in the development starts at $1.7 million, and homes have sold for more than $7 million. Extras include property taxes and annual fees as high as $12,000 to cover perks, which include park passes, door-to-park transportation, extended hours for visiting attractions such as the Magic Kingdom and Epcot, and a 17,000-square-foot clubhouse with a restaurant and concierge. Residents also will have access to some of the amenities, including the spa and dining rooms at the $370 million, 444-room Four Seasons resort expected to open in Golden Oak next summer…

Many homes include nods to Mickey Mouse and friends. (Disney is willing to overlook trademark violations inside the home.) The ceiling of one of Mr. Bergami’s guest rooms has a tray ceiling in the shape of Mickey’s head. Doors have carvings of the castle, Donald Duck and Goofy.

Homeowners also have the option of adding “hidden Mickeys”—as the features are known—in everything from kitchen backsplashes to stair railings. Builder Chad Cahill included an estimated 75 hidden mouse ears in a showcase home finished earlier this year. Some are tough to spot, so when the furnished $2.7 million home sells, the new owner will receive a map of the locations.

See a 2012 post about the construction of this gated community. Sounds like the gated community is all about giving the wealthiest Disney fans what they want: an immersive Disney home just a short distance away from the Disney gates.

A thought about these wealthy Disney fans: are they easy to spot at the Disney parks? We spent a day at the Magic Kingdom in Florida last year and I was struck that the people around us looked like a broad slice of middle-class America. Granted, it is not cheap: single-day tickets were over $90, the food was moderately expensive (not as bad as I thought it might be), and many people have to travel far and pay for airfare, a hotel, and a rental car. Of course, there are lots of other things to spend big money on (for example, giving your small daughter the full princess experience), but I don’t remember seeing people who were flashing wads of money and really expensive clothes or other goods. Perhaps this says more about Americans trying to downplay their wealth (we’re all middle-class) or the findings that most millionaires don’t act like stereotypical millionaires.

“The McMansion Man” builds larger houses in the Hamptons

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The Hamptons have long been known as a retreat for the wealthy but the recent actions of one builder suggest the houses are getting bigger and nicer:

“We’re as busy as we’ve ever been,” said Joe Farrell, the president of Farrell Building, during a recent interview and tour of his $43 million, 17,000-square-foot home here. The estate, called the Sandcastle, features two bowling lanes, a skate ramp, onyx window frames and, just for fun, an A.T.M. regularly restocked with $20,000 in $10 bills…

With a customer base composed largely of Wall Street financiers, Mr. Farrell has more than 20 new homes under construction, or slated for construction, at a time, making him the biggest builder here by far. He has plans for more, many of them speculative homes built before they have buyers…

“Houses have gotten smaller over all but not entirely: 8,000 square feet was the norm, now 6,500 is,” Mr. Farrell said. “Everyone wants six or seven bedrooms and their pool and their tennis.”

Where Mr. Farrell built speculative homes that sold for as much as $20 million before the recession, he now specializes in properties that sell for between $3 million and $10 million. “Mostly, though, $3 million to $6,” he said. “I love that market — there are probably 10 times as many people in that market than to buy an eight- or nine-million-dollar house, right?”

I’m not quite sure what the issue is. The Hamptons are for the wealthy and this man builds houses for the wealthy (though they are smaller and cheaper than a short time ago). But, the article suggests there might be several things going on:

1. Even the wealthy in the United States have to be careful to not completely flaunt their wealth. In particular, when economic times are bad it doesn’t look great to keep spending at high levels when other people are struggling.

2. There is an ongoing tension between old money and new money. The older homes, associated with older money, have more character and have been part of the community for decades. The new homes, associated with new money from the finance sector or from celebrities, are seen as gauche.

3. The construction of more spec/mass housing means the whole area will suffer by appearing more generic. Any historic architecture will disappear under a flood of mass-produced McMansions.

These are interesting arguments in themselves but I suspect (1) many Americans can’t relate and (2) there is enough money involved that it doesn’t really matter – just help pave over the issues with some more money. In other words, this provides a small window into how the wealthy view change within their own neighborhoods.