Counterarguments to the claim that people should not waste money on a big house

Economist Robert Shiller argues Americans do not need large houses:

“Big houses are a waste. People are still in a mode of thinking about houses that is kind of 19th century. As we modernize, we don’t need all this space,” Shiller told the Journal…

Shiller said advanced technology has replaced the need for extra space in our homes.

“For example, we don’t need elaborate kitchens, because we have all kinds of delivery services for food. And maybe you don’t need a workshop in your basement, either. You used to have a filing cabinet for your tax information, but now it’s all electronic, so you don’t need that, either. And bookshelves, for people who read a lot. We have electronic books now, so we don’t need bookshelves anymore,” Shiller said.

“Having a big house is a symbol of success, and people want to look successful. People have to know about your achievements. How do you know, really? Who knows what people are doing in their day job? But you do see their house.”

The counterargument for a typical owner of a large house might look like this:

1. What else could be such a worthwhile investment over time? Many people assume their home will appreciate in value and a big home purchased today means not only more space but more money down the road when the home sells.

2. Private space is still important. The kitchen may not be just about cooking. Of the spaces Americans do use in their homes, the kitchen is one. Or the idea of a workshop: there can be public spaces where people could come together to share tools and use common space but how many Americans are ready for that?

3. Shiller may overestimate the rate at which people are willing to get rid of stuff in favor of electronic copies or technology-aided alternatives. Shiller cites paper and books above. But, Americans simply consume a lot, ranging from video games to decor to furniture to electronic gadgets. Don’t they need bigger houses to fit all their stuff?

4. Status symbols matter in American society. A home is a very tangible expression of status, particularly compared to smaller items like watches, smartphones, jewelry, clothing, and other items.

All of these reasons may not be the most efficient or rational but they are a product of decades of social and cultural action and values. For more reading, see an earlier post: “Explaining Why Americans Desire Larger Homes.”

Downsizing, Marie Kondo, and all the stuff Americans own

Many older Americans want to downsize (and cash out on their homes), Marie Kondo’s approach is popular, but where will all that stuff owned by older homeowners go?

Auctioneers and appraisers, junk haulers and moving companies all seem to be echoing the same thing: The market is flooded with baby boomer rejects. And they cite a number of reasons our kids are turning down the possessions we so generously offer to them. They rent rather than own, live in smaller spaces, collect more digital than physical items and tend to put their money toward experiences rather than things…

Her kids also rejected three sets of formal dinnerware, including Haviland China; vast collections of Lladro figurines and Department 56 Christmas villages; as well as 3,000 Beanie Babies and boxes of soccer awards she and her husband, who both coached for many years, earned with their children.

The only offer she got on any of her treasures? One son wants her Hallmark Frosty Friends ornaments she’s collected over 37 years “because he knows how much they are worth.”

Two scenarios could develop:

1. There will be a growing market in stuff that older Americans no longer want. Perhaps many millennials or Gen Z do not want stuff from their parents but some other American will want it. It does not just have to go to resale shops; enterprising individuals and firms could shop all these items online to find buyers interested in particular niches. Perhaps this could even expand to international markets and be shipped in bulk around the globe.

2. Much of the stuff will simply be thrown away, particularly items that are more sentimental in nature. Some lucky owners will find people to take or buy their unneeded items but much of the rest will simply find its way into landfills. Decades of consumption will end in the garbage can.

I have not seen any estimates either way of how much money all of these goods could generate or how much waste could be involved (or a combination of both).

Also, consider the implications of such a change: younger generations do not take material objects from their parents and grandparents, creating a bit of a gap in a material timeline. Perhaps the shifting of wealth from generation to generation more often takes the form of helping to pay for housing or student loans rather than tangible goods. How does this change memories and collective understandings of the past?

 

“[P]eople with tiny house budgets often have McMansion dreams”

The title of this post is part of a larger quote – “On Tiny House Hunters it is painfully transparent that people with tiny house budgets often have McMansion dreams” – as a writer reflects on HGTV’s portrayal of tiny houses:

They too yearn for an open floorplan. They want storage. They want privacy. They want sleek kitchen amenities. They want room to entertain. That desire, to entertain, is the most delusional. In a home built for one, that may, with some dieting and sucking in of the gut, accommodate two, there is no entertaining. When you buy a tiny home, you are also making a commitment to socialize with your friends elsewhere if you hope to keep those friends.

As the reality of tiny living sets in, the hunters often lament how tiny a tiny home actually is. Or they are in complete denial and exclaim that there is just so much space. In one episode of Tiny House Hunters a man sat in the “bathtub” in the tiny bathroom. He looked ridiculous, his knees practically in his mouth as he contorted himself into the improbable space. He, the realtor, and his friend, who were all viewing the property, were nonplussed, as if the goings on were perfectly normal. And there I was, shouting at the television, “What is wrong with you people?”…

Shows like House Hunters and Tiny House Hunters flourish, in part, because even now, after the mortgage crisis and financial collapse, home ownership and the American dream are synonymous. Home ownership represents success and the putting down of roots. Home ensures the stability of the American family. When you own a home, there is always a place where you belong, and where you are the master or mistress of your own domain…

A cheerful television show about homebuying isn’t going to sully itself with a frank examination of economic realities or the fallout from predatory lending practices that made so many people believe they could afford to live beyond their means. Instead, Tiny House Hunters allows people the trappings of a middle-class lifestyle, regardless of their actual economic circumstances. The homes the hunters look at are often stylish, modern reinterpretations of the cookie-cutter prefabricated homes that inspire so much cultural derision. They may not have much space but what space they have is well appointed and chic or quirky. Tiny house hunters can soothe their class anxiety and stay just within reach of what they so very much want but cannot afford to have.

This leads me to two thoughts:

  1. As the piece notes, there is an important connection here to social class. People on this show want to have a middle-class (or higher) lifestyle in a small package. They are often unwilling to give up on certain items just because they are pursuing a smaller house. Additionally, I would argue that this quest to downsize is a largely middle- to upper-class phenomenon. The people on the show are not ones driven to tiny houses solely because of economic necessity. The cost savings may be nice but they also talk about reinforcing familial bonds, being able to move a home around more easily, consuming less, and helping save the environment. As the writer notes, they are not seeking after mobile homes and the class implications associated with them. Instead, they often want customized tiny houses that continue to display their higher than lower-class lifestyle.
  2. Some might applaud these people for realizing they don’t need such a large house. Instead of purchasing a McMansion or even the average size new home (around 2,500 square feet), these people are consuming fewer resources and resisting the strong pull of consumerism. At the same time, they still find something valuable in owning their own home. Why does this interest in home ownership continue? if people truly wanted a more environmentally friendly option, shouldn’t they go move into a small apartment in a dense urban area where they don’t need to drive much? (Many of the tiny houses on HGTV are frequently in more rural settings and still require a lot of driving.) In other words, even having a tiny house still allows these homeowners to participate in the middle-class American Dream which largely revolves around owning your own detached home.

And just as a reminder, there is little evidence that many Americans desire a tiny house. As of now, they largely appeal to a small subset of the population that does not necessarily need them.

Miniaturize yourself to afford a McMansion

Here is a (fanciful) way to truly downsize and still acquire a McMansion:

Matt Damon stars as Paul Safranek, an overstretched man in an overstretched world, working as an occupational therapist down at Omaha Steaks and still living in the house where he was born. Paul hungers for a fresh start and finds it courtesy of the newfangled technique of “cellular miniaturisation”, which promptly shrinks the recipient to a height of five inches. This technique has apparently been pioneered by scientists out in Norway, although one might just as easily claim that Payne has been doing it for years. Films like Election, Sideways and Nebraska, for instance, spotlighted a burgeoning crisis in American masculinity, focusing on men who fear that they’re seen as small by the world. With the excellent Downsizing, Payne has simply gone that extra mile.

The benefits for Paul are clear from the outset. As a little man, he costs less and consumes less. His assets of $152,000 convert to a whopping $12m in the bonsai community of Leisureland Estates, which means that he can now afford a McMansion or a luxury bachelor pad, like one of those cash-poor Londoners who sells their Hackney flat and then buys up half of Rotherham. A flick of the switch and the process is complete. Afterwards the nurses return to theatre and lift the clients from their beds aboard small steel spatulas…

The point, of course, is that glass-domed Leisureland is merely America in microcosm, with all the same corruption and wealth-disparity, loneliness and strife. Neither does it exist in splendid isolation. If the outside world starts to burn, then Leisureland is all-but guaranteed to go down in flames too.

It sounds like the McMansion critics win in the end in this fantasy land.

Seriously though, wouldn’t many Americans want to say they had both downsized as well as acquired a sizable and well-appointed house? Here is how this could happen:

  1. Given the size of many new houses in recent years, people could downsize – lose 1,000+ square feet – and still have really large houses.
  2. Downsizing does not necessarily mean giving up amenities. What if someone gives up a large home for a smaller home but it has all the latest features or is located in the trendy neighborhood? Downsizing can be associated with trying to live a simpler life but this could be hard for many.

We’ll have to wait and see what those with the potential to downsize – largely Baby Boomers – actually do.

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

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.

Yes, Thoreau would have disliked McMansions

One writer describes how Thoreau helped her move on from her McMansion:

“The cost of a thing is the amount of what
I will call life which is required to be exchanged for it,
immediately or in the long run.”
Henry David Thoreau, Walden

These words hit me hard at the age of 29. It was 2008, and depending on the hour, I was watching my marriage unravel, witnessing the collapse of the financial markets from the office of my first-year financial planning business, or determining whether I was even or underwater on a 2,500-square-foot McMansion. Collectively, my husband and I were $275,000 in debt…

One day I picked up the book and read it all the way through. I looked around my home and finally understood: I was drowning in debt, and my lifestyle was making me miserable. I exhausted hours every Sunday dusting, vacuuming, and mopping. I spent the majority of my time either working to pay for things like furniture or electronic gadgets or fearfully maintaining them by obsessively dusting and scrubbing. I could see my future, and it looked bleak…

Seven years have gone by since I left that lifestyle, and so much has changed. I now make about half the annual income I once did, teaching yoga, writing about health and wellness, and waitressing part time. I have good days and bad days, but I no longer feel controlled by debt. I take 12–16 weeks off each year and one winter spent four months on the Big Island of Hawaii, eating homemade dinners on the beach and listening to the trumpets of humpback whales. In moments like those, when the magic and wonder of the world offer themselves so vividly, I experience so much gratitude for simply being alive.

It is interesting to note that the anti-consumption narrative of today – avoid the McMansions and big debt, simplify your life, pay more attention to things you love – is not exactly new. It could appeal to more people today after the spread of consumerism throughout much of American society with the prosperity of the 20th century. McMansions make easy targets since they require a large financial outlay (not only is it costly but it requires payments for a significant portion of adult life), require maintenance (whether because of cleaning, repairs, or making use of all that space), and critics argue they are meant to impress other people.

In the end, I wonder if Thoreau would find such efforts as described above enough to truly get away from modern life. Are vast resources now required to get away from it all?

Does “smart-sizing” sound a lot better than “down-sizing”?

One writer suggests “down-sizing” is too negative and instead would prefer to use “smart-sizing” instead:

In the world of real estate, downsizing generally refers to reducing the size of the property you live in and the amount of stuff you have. Downsizing is something most homeowners will do at some point in their lives and it can be a very positive and necessary experience when property needs change. So why do many people have a negative reaction to the word?

When I hear someone say they are ‘downsizing,’ my writer’s imagination goes into high gear and I immediately picture this elderly couple, giving away most of their worldly possessions, leaving the home they have lived in for 50 years to move into an anonymous condo somewhere — maybe in Florida — far away from the familiar faces of friends and loved ones and the city they call home. And even though the move to a more manageable property may be a good thing for a variety of positive reasons — “downsizing” to me still feels like something is being lost…

Buying and selling property comes with some hefty emotional baggage, so why add to it by using words that can have negative associations when new, more positive selections are available?

After a quick Google search, I found precisely the right word to replace downsizing in my vocabulary: Smart-sizing. Don’t you feel a rush of positivity right now?

I’m guessing many people would prefer to affix “smart” to their own activities. But, what exactly does the term mean?

Smart-sizing means finding the right-sized property for your individual needs. It makes sense to purchase a home best suited for your lifestyle, needs and budget, at any stage in life. This applies equally to first-time home buyers who want ultra-energy efficient houses with a smaller building footprint, to property ladder climbers with expanding families, to baby boomers with shrinking families, and to seniors who would rather spend time with loved ones, or travelling, or any other form of recreation without the burden of maintaining (or paying for!) a large property.

Here is what might be happening. “Down-sizing” implies that people are getting out of the status seeking game, possibly because they can’t keep up or no longer want to. Americans tend to like bigger homes and more stuff – it is built into our individualistic, consumeristic DNA. If people are moving to a smaller home and getting rid of stuff, they are moving back down that status ladder. “Smart-sizing” gets at something else. It covers up the bigger is better consumption motives behind homes and stuff and replaces it with customization and what individual homeowners need. Some people might need a pool and hot tub, others might still want a McMansions, others might need a cheaper home that suits their income. All these people win with a “smart-sized” home that fits their needs. Others have made this pitch before; architect Sarah Susanka argues for the Not-So-Big House. However, given the lifestyles of the individual owners, such homes may not really be cheaper or all that less luxurious.

In the end, do people with “smart-sized” homes have smaller, greener homes with less stuff? Maybe…