Tag Archives: homeownership

Painting the lawn has adverse effects on photosynthesis

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Painting the lawn or the playing field could have some adverse effects on the grass itself:

Yep, the September-October issue of Crop Science highlights a study out of North Carolina State University that shows conclusively — brace yourself — that “grasses coated with latex paints show a notable reduction in photosynthesis.” They’re talking about playing fields, of course, and the lines, stripes and logos regularly affixed atop them.

That’s all well and good, but it completely ignores an aspect of turf painting that has nothing to do with lines or logos. Sports, it seems, has a long tradition of painting grass simply to make it look more like grass.

  • When the clear panels in the roof of the Astrodome had to be painted over in 1965 because the resulting glare was blinding fielders, the turf beneath them died, and was subsequently painted green…
  • Groundskeepers at Cleveland’s Municipal Stadium didn’t even bother with grass — for many years they painted the dirt green. (Pat Summerall wrote that when he played for the New York Giants, the Yankee Stadium Grounds crew took to painting the dirt, as well.)…

The practice even carries over to movies, where they painted the stadium grass twice for Bull Durham, yet it still, said writer/director Ron Shelton, “looks yellow on film.”

Painting the grass and using artificial turf has a long history in sports. A number of teams and facilities have gone to the field turf primarily for monetary reasons as it is cheaper to maintain.

This brings me to an idea: how long until homeowners go for artificial turf? I’m not talking about the Astroturf featured in the Brady Bunch yard but field turf that looks and feels more like grass. Perhaps the rubberized turf could even be sold as safer for children. For builders and developers, putting down good turf may be more expensive upfront than laying down sod but perhaps the costs could be passed along to homebuyers, particularly if it were guaranteed for a number of years.

How will American culture change since Millennials want to buy the newest smartphones rather than cars and houses?

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Here is part of a fascinating article about what Millennials want to purchase and how this differs from the consumption of previous generations:

Needless to say, the Great Recession is responsible for some of the decline. But it’s highly possible that a perfect storm of economic and demographic factors—from high gas prices, to re-­urbanization, to stagnating wages, to new technologies enabling a different kind of consumption—has fundamentally changed the game for Millennials. The largest generation in American history might never spend as lavishly as its parents did—nor on the same things. Since the end of World War II, new cars and suburban houses have powered the world’s largest economy and propelled our most impressive recoveries. Millennials may have lost interest in both…Subaru’s publicist Doug O’Reilly told us, “The Millennial wants to tell people not just ‘I’ve made it,’ but also ‘I’m a tech person.’?” Smartphones compete against cars for young people’s big-ticket dollars, since the cost of a good phone and data plan can exceed $1,000 a year. But they also provide some of the same psychic benefits—opening new vistas and carrying us far from the physical space in which we reside. “You no longer need to feel connected to your friends with a car when you have this technology that’s so ubiquitous, it transcends time and space,” Connelly said.

In other words, mobile technology has empowered more than just car-sharing. It has empowered friendships that can be maintained from a distance. The upshot could be a continuing shift from automobiles to mobile technology, and a big reduction in spending…

In some respects, Millennials’ residential aspirations appear to be changing just as significantly as their driving habits—indeed, the two may be related. The old cul-de-sacs of Revolutionary Road and Desperate Housewives have fallen out of favor with Generation Y. Rising instead are both city centers and what some developers call “urban light”—denser suburbs that revolve around a walkable town center. “People are very eager to create a life that blends the best features of the American suburb—schools still being the primary, although not the only, draw—and urbanity,” says Adam Ducker, a managing director at the real-estate consultancy RCLCO. These are places like Culver City, California, and Evanston, Illinois, where residents can stroll among shops and restaurants or hop on public transportation. Such small cities and town centers lend themselves to tighter, smaller housing developments, whether apartments in the middle of town, or small houses a five-minute drive away. An RCLCO survey from 2007 found that 43 percent of Gen?Yers would prefer to live in a close-in suburb, where both the houses and the need for a car are smaller.

This article is primarily about the economic impacts of these shifting patterns but I think there is another important side to this: how does this affect American culture? A few ideas…

1. What makes up the American Dream will likely shift. We have gone almost 100 years with this combination: a house of one’s own and a car (or multiple cars in recent decades). The content of this dream will change and the pace to which people pursue it. Newest additions to the Dream: can I get a smartphone with an unthrottled data plan? How about a living arrangement that is exciting in terms of having nearby cultural and social opportunities but doesn’t tie one down financially?

2. As fewer teenagers see getting a driver’s license as the same sort of initiation into adulthood and freedom as previous generations, perhaps we have a new marker of adulthood: getting the first smartphone (with at least texting capabilities and perhaps also data).

3. As I’ve discussed before, the possible new kinds of suburbia we might see in the coming decades would be a remarkable shift away from completely auto-dependent developments. This will lead to some interesting consequences for housing. New Urbanism may just explode in popularity (as long as such developments are reasonably priced).

4. The car is no longer an important status symbol but rather more like a tool that is used to get from Point A to Point B. Tools may have some fun features but the number one concern is that that they function consistently. In contrast, the phone (and what one can do with it) becomes a status symbol.

5. As we’ve seen in recent years, announcements of new technologies and smartphones will garner increasing levels of attention. Just look at what happens when we get close to an Apple announcement for the newer iPhone (or iPad). Cars and houses will have to fight even harder for your attention. How this changes the ratio and content of commercials will be interesting to watch.

6. When are we going to see television shows and movies that truly reflect plugged in and online worlds? We have plenty of examples where characters use these devices but precious few that show what it is like to consistently operate in the online and offline worlds. The movie Catfish comes to mind. While most online users won’t go to the lengths the characters do in this movie, at least it depicts people living out real relationships in the online sphere.

7. A growing push for cheaper, faster, perhaps even free Internet access everywhere. To be disconnected will be viewed as more and more undesirable.

8. Revamping existing housing stock will require some imagination and creativity in marketing, construction, and financing.

9. Building off Richard Florida’s ideas about the creative class, what happens when this group becomes too big and unwieldy and is no longer “select,” there are not enough places that meet their requirements (not everywhere can be Austin), and not enough jobs for people with their education and interests? Obviously, shifts can take place but these won’t necessarily be easy.

Australia retakes the lead for largest new homes in the world

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In recent years, Australia and the United States have alternated having the largest new homes. New data suggests Australia has retaken the lead:

In any case, that Australian homes should be costly is not so surprising given the peculiarities of the domestic market.

The Australian dream requires you to own a detached house with a large garden, a land-hungry type of accommodation that makes up no less than 76 percent of all homes.

Three-quarters of all homes have three or more bedrooms, and almost a third have four or more. The average newly built home is now the largest of any country at 243 square meters (2,615 square feet), taking the McMansion mantle from the United States.

And, while it is one of the emptiest countries on the planet, it is also one of the most urbanized, with most of the population crowding the coast in just eight sprawling cities.

I wonder how much this has to do with something I suspect is at play in the United States: housing starts may be down but those that are being built are primarily aimed at the upper ends of the market toward people who haven’t been hit as hard by the recession.

It is interesting that this is buried in the final paragraphs of a story about the Australian housing market. The overall piece suggests that a country can have large homes without necessarily having an overextended housing market like we see in the United States. One complaint about McMansions in the United States is that they have ruined the housing market, pushing buyers and lenders to have bloated mortgages and generally corresponding with American habits of overspending and incurring debt. But it doesn’t have to be this way: the article tells of different mortgage patterns in Australia such as homeowners paying them off quicker and having a small amount of subprime loans. In other words, having a large home doesn’t have to be tied to the ideas of profligate spending if the system is set up in a different way.

If your lawn is all brown, just paint it green

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Americans will go to some lengths to keep their lawn green – including painting it.

As the worst drought in decades hits two-thirds of the USA, residents and businesses in normally well-watered areas are catching on to the lawn-painting practice employed for years in the drier West and Southwest…

Perazzo said the dyed lawns will hold their look for a few months…

In the frequently parched Phoenix area, Brian Howland said he started Arizona Lawn Painting after the nationwide foreclosure crisis left scores of homes empty and their lawns neglected.

Some customers have been residents fearful that their homeowners’ associations will penalize them for letting their lawns fade.

This is either an example of American ingenuity, fear of homeowner’s associations, or a strange quest to maintain face/status as a homeowner.

I would love to know if neighbors look down on their neighbors who have to dye their lawn. In other words, how much status can one recover through this method? Another way to think about this would be to look at whether homes on the real estate market with dyed lawns do better or worse in terms of time on the market and sales price. The best thing that can come out of dyeing seems to be that those unfamiliar with the lawn and neighborhood might not know any better.

Century 21 survey suggests many Americans would cut back in other areas to buy their “dream home

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A new survey from Century 21 looks at what other purchases Americans would be willing to sacrifice in order to afford their “dream home”:

69 percent of homeowners who don’t own what they described as their “dream home” would be willing to make sacrifices to their personal lifestyle to be financially able to purchase it. Non-homeowners are more willing to make sacrifices, and 80 percent indicated they are willing to make changes to their personal lifestyle in order to be financially able purchase their dream home, including:

  • 50 percent: would cut back on dining out,
  • 49 percent: would cut back on their shopping for non-essential items (e.g.,
    clothing, accessories, gadgets, etc.),
  • 47 percent: would give up luxuries (e.g., expensive cable packages, trips to the
    salon, etc.),
  • 39 percent: would cut back on vacations, and
  • 10 percent would contribute less to their 401(k) in order to be able to purchase
    their dream home.

This suggests buying a home is still an important priority for many Americans. At the same time, the questions don’t really get at how much people might be willing to cut back (5% on dining out? 50%), how this compares to other purchases (would people say similar things if they were asked about purchasing a new car or some other big purchase), and how much people would need to cut back if they bought a house (there could be a big difference here if people bought a $220k home versus a $450k home). Also, I’m curious about that 50% that wouldn’t cut back on dining out or the 61% who wouldn’t cut back on vacations; do they not need to or would they seriously not do so in order to buy a dream house?

Another note: this was a web survey.

Harris Interactive® fielded the study on behalf of Mullen Communications from April 24-26, 2012, via its QuickQuerySM online omnibus service, interviewing 2,213 U.S. adults aged 18 years and older, of which 1,416 are homeowners and 734 are renters. This data was weighted to reflect the composition of the general adult population. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Two issues here: this was not a random sample (hence the need for weighting) and if there can’t be any estimates of the sampling error, how trustworthy are the results?

Time’s “The History of the American Dream” a limited overview

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Time’s latest cover story titled “The History of the American Dream” (here is the image and the story) seems to be the epitome of a piece that runs when there isn’t big news for the week (and they were just a day or two away from leading with the Jerry Sandusky verdict…). The article itself offers a limited history while repeatedly suggesting the idea of the American Dream is under attack because of economic and political realities. Here are a few quotes from the story:

The Dream is about liberty and prosperity and stability, but it is also about escape and reinvention. Mark Twain understood this. The Adventures of Huckleberry Finn doesn’t flinch from the racism and greed of American life. If there is any redemption to be found, it comes from small moments of communion, of humanity. The novel concludes with the enslaved Jim’s being granted his freedom and Huck’s deciding “to light out for the Territory, ahead of the rest” — an enduring American impulse and an essential element of the American Dream.

The myth of the West was the myth of the nation: that all of us could light out for the Territory and build new, prosperous lives. The allure of the belief in the individual’s capacity to make his way — to cross oceans or mountains — only grew stronger as America grew older. Our center of political gravity has always been in motion from east to west (and, to a real extent, from north to south). Though the Census of 1890 declared that the frontier was no more, the idea of packing up and moving on to better things has never faded.

Yet there is a missing character in this popular version of the story of America’s rugged individualism: the government, which helped make the rise of the individual possible. Americans have never liked acknowledging that what we now call the public sector has always been integral to making the private sector successful. Given the American Revolution’s origins as a rebellion against taxation and distant authority, such skepticism is understandable, even if it’s not well founded. As we have with race, we have long proved ourselves quite capable of living with this contradiction, using Hamiltonian means (centralized decisionmaking) while speaking in Jeffersonian rhetorical terms (that government is best which governs least).

The best part of the article: it mentions the important role of government (though he could have included state and local governments as well). Jon Meacham discusses how the government supported the railroad as it granted charters, right-of-ways, and land to companies that wanted to make money and also happened to open up the interior. The contrast here is interesting and instructive: Americans claim to be individualists but the American Dream has been supported by government policies and monies for a long time.

A few things the article could have done better and both of these are tied to more recent understandings of what the American Dream means:

1. Meacham tries to take the big picture here going back to the founders and discussing the Civil Rights Movement. But he misses a key component of the American Dream as it is understood today: the connection to the American suburbs and homeownership. This movement has transformed the country from a land of frontiers to a suburban nation where since the early 1900s, those with opportunity tend to move out of the city to a place that offers some of the city and country.

2. Meacham also misses the role of consumption. Meacham is talking about big ideals in this story but for some Americans, the Dream means being able to live at a certain level. This is exemplified by an early quote in this story about the findings from a White House Task Force:

“middle-class families are defined by their aspirations more than their income. [We assume] that middle-class families aspire to homeownership, a car, college education for their children, health and retirement security and occasional family vacations.”

This is all about consumption, even if each of these objects could be argued to promote liberty, happiness, and human flourishing. The idea of the American Dream was sold heavily to the American public starting in the early 1900s by corporations who wanted to sell refrigerators, cars, radios, and other products. Indeed, the modern understanding of the American Dream is very much influenced by the rise of the mass-production economy as well as the economic prosperity America experienced.

Richard Florida: homeownership not related to economic growth and development

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Richard Florida looks at some data and argues that homeownership is not related to several dimensions of economic growth and development:

The economic growth and development of cities and regions is generally thought to be driven by three key factors: innovation, human capital, and productivity. Homeownership, it turns out, is not related to any of them.

Take innovation and high-tech industry. Homeownership bears little relation to either, being weakly negatively associated with the concentration of high-tech industry (-.20) and not associated at all with innovation (measured as the rate of patenting).

Or consider the percentage of college graduates or share of highly-skilled knowledge/creative jobs. Again, nothing. The arrow in fact points in the wrong direction. Homeownership is weakly negatively correlated with both the share of college grads (-.27), and with the creative class share of the labor force (-.30).

What about productivity? Once again, no connection to homeownership. Homeownership is weakly negatively associated with economic output per capita (-.19)…

It used to be that homeownership signaled and led to economic growth. But that relationship was tied to the industrial era, when building and buying more homes primed the pump of America’s great assembly-lines, increasing demand for cars, appliances, televisions, and all manner of consumer durables. Those days are gone. The United States is a now knowledge and service economy; less than ten percent of Americans work in some form of manufacturing and just 6.5 percent are engaged in actually producing things. The stuff Americans buy is largely made offshore.

I wonder how this relates to the recent campaign from the National Association of Realtors regarding how building homes would lead to more jobs. While having more construction might lead to some good short-term outcomes, Florida is arguing here that homeownership doesn’t have a large influence on the economy.

Going beyond the economic impact of homeownership and building homes, these statistics don’t quite capture the cultural influence of homeownership in American culture. At the same time, the numbers might suggest that policymakers shouldn’t go all in for promoting homeownership for its economic benefits. Selling homeownership can be done by linking it to values of individualism or the American Dream but the larger economic angle doesn’t hold up.

I wonder what the story would be utilizing data that allow analysis beyond correlations…

Argument: fake “House Hunters” does a disservice to the realities of American homeownership

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Responding to the recent news that the HGTV show House Hunters may be fake, one writer suggests this does a disservice to the realities of American homeownership:

So what’s the problem? By now, the onus is on the viewer to consume all “reality television” with a chuckle and a grain of salt. The genre’s underlying appeal is often rooted in its escapist, aspirational qualities (or, at other end of the spectrum, its indulgence of our basest schadenfreude). But House Hunters was always much more about showing us an attainable reality than a fantasy. The show (and its many iterations), in which people just like us (juggling budgets, worried about school districts, pulled between city and suburb), go shopping for the best home their money can buy, not only glorifies the dream of home ownership, but makes it seem achievable. (If that IT guy and his elementary school teacher wife can successfully get out of their dingy apartment and into a new home with the requisite granite countertops, “marriage-saving” double vanities, and bedroom-sized walk-in closets, so can I!) This plays right into our inexplicably unwavering attachment to home ownership: Despite the collapse of the housing market, polling continues to demonstrate that we regard owning a home as the cornerstone of the American Dream—a perception that undoubtedly played a role in the home-buying craze prior to the bubble’s burst.

Showing houses that aren’t even for sale at prices divined by its producers, House Hunters is presenting dangerous misinformation about the home-buying process and deleting all of the accompanying complications and consequences. It’s turned what is actually a messy, frustrating, often dead-end process into a seamless (and perhaps necessary) path toward fulfillment. What’s more, it seems likely that viewers use the prices, locations, and home criteria discussed on the show as barometers for their own house hunts because the information is presented as fact. No, House Hunters does not explicitly condone selling one’s soul for a white picket fence, and other HGTV shows like My First Place and Property Virgins do delve into money and home-inspection woes from time to time. But doesn’t HGTV have some obligation to portray the housing market as it is, or, at the very least, offer a pronounced disclaimer about the producers’ creative and logistical liberties?

Maybe they could fix this whole mess and wipe the slate clean with a good old fashioned “where are they now” episode, showing us the truth after those mortgage payments start taking a toll.

So the main worry here is that House Hunters makes homeownership seem too easy and could lead too many people into more decisions? Perhaps we need an extra paragraph here extolling the virtues of renting…

I’m not sure what to make of this argument. Homeownership is indeed an American value. One could argue that HGTV itself stands as a giant beacon for homeownership and a consumerist lifestyle. Is this necessarily bad? Does HGTV simply reflect the interests Americans have or does it insidiously push people toward too much homeownership and consumption? Are impressionable kids and adults watching this channel and then going out and spending beyond their means? I don’t think we have the public data to examine this (though some marketing company may have this information).

In the end, I suppose it comes down to this: do you think HGTV has a moral/ethical/social obligation to also show the downsides of homeownership?

40% drop in Americans’ wealth tied strongly to declining housing values

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Homeownership is big in American cultural ideology as well as on American asset sheets. Thus, when housing values drop, the wealth of Americans drops:

The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992…

But it was the implosion of the housing market that inflicted much of the pain. The median value of Americans’ stake in their homes fell by 42 percent between 2007 and 2010, to $55,000, according to the Fed.

The poorest families suffered the biggest loss of wealth from the drop in real estate prices. But middle-class Americans rely on housing for a larger part of their net worth. For some, it accounts for just more than half of their assets. That means every step downward is felt more acutely.

Rakesh Kochhar, associate director of research at the Pew Hispanic Center, calls this phenomenon the “reverse wealth effect.” As consumers watched the value of their homes rise during the boom, they felt more confident spending money, even if they did not actually cash in on the gains. Now, the moribund housing market has made many Americans wary of spending, even if their losses are just on paper.

Alas, it doesn’t look like housing values will be shooting back up anytime soon.

Some other tidbits regarding housing and wealth from the Federal Reserve report:

-“The decline in median net worth was especially large for families in groups where housing was a larger share of assets, such as families headed by someone 35 to 44 years old (median net worth fell 54.4 percent) and families in the West region (median net worth fell 55.3 percent).” (p.2)

-“Housing was of greater importance than financial assets for the wealth position of most families. The national purchase-only LoanPerformance Home Price Index produced by First American CoreLogic fell 22.4 percent between September 2007 and September 2010, by which point house prices were fully 27.5 percent below the peak achieved in April 2006. The decline in house prices was most rapid in the states where the boom had been greatest. For example, California, Nevada, Arizona, and Florida saw declines of 40 to 50 percent, while Iowa saw a decline of only about 1 percent. Homeownership rates fell over the period, in part because some families found it impossible to continue to afford their homes. By 2010, the homeownership rate was back down to a level last seen in the 2001 SCF, although that was still higher than in any previous SCF since at least 1989.” (p.4)

-“As might be expected from the previous discussion on the role of the decline in housing values in explaining median and mean wealth losses across various demographic groups, there are large differences in net worth changes by housing status. Median net worth for homeowners fell 29.1 percent between 2007 and 2010, while the mean fell 12.7 percent. The decline in median net worth for non-homeowners (hereafter, renters) was only 5.6 percent, though the decline in the mean was much larger at 23.4 percent. Renters have much lower median and mean net worth than homeowners in any survey year, so the dollar value of wealth losses for the renter group tended to be much smaller; for example, the median net worth of renters fell $300 over the three-year period, in contrast with $71,500 for
homeowners.” (p.22)

-“Housing wealth represents a large component of total family wealth; in 2010, primary residences accounted for 29.5 percent of total family assets. Over the 2007–10 period, this percentage declined 2.2 percentage points overall. The relative importance of housing in the total asset portfolio varies substantially over the income distribution, with housing generally constituting a progressively smaller share of assets with increasing levels of income, as shown in the following table…Homeowners in virtually all demographic groups saw losses in the median, and most of those losses were substantial; the one exception was the lowest quartile of the net worth distribution, where homeownership
jumped 8.1 percentage points and the median home value increased 31.2 percent, most likely reflecting a compositional shift within that lowest wealth group. Otherwise, substantial decreases in median housing values were widespread.” (p.47-49)

It sounds like the West (compared to other regions) and homeowners (compared to renters) were hit hard by a drop in housing values.

Ninety percent of Americans still say “homeownership is part of the American dream”

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Commentators may be touting the virtues of renting but according to a recent poll from the Woodrow Wilson Center, a clear majority of Americans still think homeownership is a worthwhile goal:

Voters personally put very high importance on homeownership. When asked to indicate on a scale of zero to ten where zero means homeownership is not at all important and ten means it is extremely important, voters rate the importance of homeownership as a mean score of 8.597.

-Fully 62% of all voters rated homeownership as a ten out of ten. Those most likely to indicate homeownership is extremely important are voters in states with lower unemployment rates as well as rural (71%) and urban (67%) areas.

-Importance placed on homeownership increases with age where just 53% of 18-44 years old indicate it is extremely important but 64% of those 45-64 and 72% of those over 65 years old would rate it as a ten out of ten…

When asked to consider the importance of homeownership compared to five years ago, one-third of voters feel homeownership is more important (33%) and 51% feel it is just as important. Only 12% of voters say homeownership is less important than it was five years ago…

A majority (54%) of voters believe that “increasing homeownership should be a national priority.” By comparison, voters universally (90%) believe that “homeownership is part of the American Dream.”

Considering some of what I have read in recent years, this is overwhelming support for homeownership. The economy may be bad, foreclosures may be more common, some 15 million homes have underwater mortgages, and homeownership rates are trending down, but it will take a long time before Americans give up the dream of homeownership. It is interesting to note in the figures above that younger American adults see homeownership as less important. It is also interesting to note that there are more mixed opinions about how much the government should be involved with the mortgage industry or promoting homeownership.

This is based on telephone interviews with 1,000 “registered ‘likely’ voters.”

A NPR story on these poll results suggests the dream of homeownership runs deep in American history:

The term “American dream” became popular in the 1930s, says Bob Shiller, a housing economist at Yale. “But I associate it with the suburban movement that developed after World War II,” he says…

The American tradition of actively encouraging home- or farm ownership dates back even further, he says.

“That was the real American dream — [owning] your own farm. So we had the Homestead Act in the 1860s that made it possible for anyone with modest means to buy a farm,” he says.

Still earlier, the French historian Alexis de Tocqueville noted the importance of homeownership in his book Democracy in America, published in the 1830s and based on his travels around the country.

“He noticed the independent streak of Americans and their desire to own their own farm and their own home,” Shiller says. “He thought that that represented a kind of anti-feudal feeling — that each person in this country is an independent agent. There is no landlord or lord with his thumb on you.”

History doesn’t change overnight though feelings about homeownership could change within a generation or two.