Tag Archives: housing

Nostalgia for the early 1990s: McMansions, SUVs, and more

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The early 1990s are not that long ago but this comparison of the 2011 Ford Explorer and the 2011 Jeep Grand Cherokee is wistful for this earlier era:

The early 1990s are starting to seem like a long time ago. McMansions were barely a twinkle in the Toll brothers’ eyes. Apple stock was less than fifteen dollars a share. The Iraq war was going great. A tea party was something for little girls. And Justin Bieber hadn’t even been born.

In the U.S. car market, perhaps the biggest difference between then and now is that the SUV, as an automotive force, was in its infancy. Sure, Wranglers, Blazers, Broncos, Scouts, and the like had been bouncing along on the fringe of the American automotive scene for a while, but their numbers were small.

I am interested in this mention of McMansions, which has several connotations in these opening paragraphs:

1. It is not unusual to lump the McMansion in with other consumer objects. Perhaps its most common pairing is with the SUV, often considered an oversized and ostentatious vehicle.

2. The Toll Brothers, a large American home builder, are often tied to McMansions. This builder preferred to call their larger homes “estate homes” but critics ended up dubbing them McMansions. Read a quick summary of Toll Brothers history here. The term McMansions really started being used in earnest in the late 1990s.

3. There seems to be a growing idea that the McMansion might have been a blip in American history. This review pegs the McMansion as beginning in the 1990s and other recent commentators (see here and here) have suggested McMansions are done and will not return. The jury is still out on this one: the size of the average American home grew steadily from the 1950s until just a few years ago.

(4. An unrelated issue: can we already have nostalgia for a time just 20 years ago? Think of this in terms of “oldies” on the radio: it’s hard to even find 60’s music on the radio and now the 80’s and 90’s are considered old. How far can we compress the past in order to develop a prepackaged nostalgia?)

Discussing the mortgage interest deduction and how pricy (and large) a McMansion is

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One common use of the term McMansion is simply a large home. In this blog post about the mortgage interest deduction, the writer contrasts the price of McMansions to more normal-sized homes:

That means average homeowners with modest Capes and fixer-uppers are helping subsidize others stretching to keep up with the Jones and their million-dollar McMansions.

The measuring stick of a McMansion in this post is how large the mortgage is:

A close look at the interest rate deduction reveals much of its benefits go to homeowners with mortgages far larger than most in the middle of the housing pack. Check out this Forbes piece, which nicely lays out the argument for taking away this perk from the homeowners with outsized mortgages – incredibly the limit is currently $1 million…

The president’s deficit commission recommended capping the deduction’s use at $500,000 in mortgage debt, down from $1 million now, while nixing its use for vacation homes and converting what’s left to a 12.5 percent tax credit.

OK, I vote for keeping it simple and just lowering the mortgage cap to $500,000 or $600,000, while making second homes ineligible as well.

So a McMansion here would start with homes that cost $500,000 to $600,000. In most suburban communities, this buys a large home. In denser areas, not necessarily. What about older homes that cost this much – are these McMansions? It wouldn’t take too much searching online of real estate listings to translate these prices into square footage in particular areas.

Overall, this use of the term McMansion seems to refer to any large house beyond “modest Capes and fixer-uppers.” This use of the term seems quite vague: a McMansion is any (presumably larger) house above a certain price point.

Gated communities on HGTV

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As someone who studies suburbs and housing, I admit enjoying watching people choose homes on HGTV on shows like House Hunters. I’ve noticed that one factor that occasionally influences the choice of homes is whether it is located in a gated community. A few thoughts about this topic, gated communities, which has attracted more attention from sociologists and planner in the last two decades:

1. On these shows, the gated communities often pop up in the South or West, particularly in Florida or California.

2. We rarely see any evidence of the gated community like the entryway to the neighborhood (a fake guardhouse or a real guardhouse?)  or a fence around the entire neighborhood. We are simply told that the suburban home is in a gated community.

3.  At least when making their choices on screen, the people rarely talk much about the fact that a home is in a gated community. This is probably due to the fact that the show is supposed to be about the home and not the neighborhood. (So how about a new show where it is less about the individual housing unit and more about selecting a neighborhood?)

4. The homes in the gated communities vs. those that are not in a gated community look very similar. Ultimately, it is really rare that anyone on this show is selecting a home that is in a “unsafe neighborhood.” As sociologists have suggested, living in a gated community is often a decision made regarding some amorphous outside threat. They are devices that portray a certain image while also acting as reassurance for residents. As some have shown, like Setha Low in Behind the Gates, some suburban residents feel very afraid even when they live in exclusive, upscale neighborhoods. The gates in many neighborhoods don’t really keep people out but they help the residents feel better.

Charlotte columnist suggests suburbs will face four problems

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American suburbs contain the majority of United States residents (and this figure is likely to grow in the latest 2010 Census figures). And yet, there are a lot of questions about what the future of suburbs will be. A columnist/editor in Charlotte suggests suburbs will face four problems in the near future:

Demographics. Population trends favor urban-style, multifamily development. Gen Y’ers have a clear preference, at least for now, for urban living. Meantime, aging boomers will be selling houses and moving to condos or apartments. As illness and infirmity hit, many will have to give up driving. They’ll want walkable neighborhoods.

With the foreclosure crisis, the single-family home market will be sluggish for years. The nation is overbuilt on large-lot suburbia, and underbuilt in cities. The Urban Land Institute’s “Emerging Trends in Real Estate 2011” has this advice to investors: “Avoid commodity, half-finished subdivisions in the suburban outer edge and McMansions; they are so yesterday.”

Fuel prices. Remember when $4-a-gallon gas walloped the economy in 2008? Now, gas prices are over $3 again. Gas prices are likely to keep rising, and already, transportation is the No. 2 cost for average U.S. households. With pay and jobs sinking, more people are likely to want to live where they can drive less.

Carbon footprint. If we’re to avoid creating even more destructive changes in the world’s climate (more droughts, floods, blizzards or heat waves) for our children and grandchildren to live with, more of us will need to live in tight-knit, walkable cities. It turns out city dwellers have a much smaller carbon footprint.

Suburbs on the brink. Although some first-ring suburbs are thriving, others aren’t. Many suburban neighborhoods are seeing rising poverty and crime, dead or dying malls and derelict strip centers and big-box stores. We can’t just abandon them to blight.

These are all possible issues. Some thoughts about each concern:

1. We will have to see what Generation Y and the aging Baby Boomers want in the long term. Will they want to move back to cities or will they be okay with denser suburban development?

2. Fuel prices are up and American driving is down. What happens if most people can access electric cars within 10 years?

3. Carbon footprints – are people convinced that they should change their personal, residential choices based on this evidence? Do Generation Y members choose to live in cities for this reason or for other reasons such as proximity to entertainment and culture.

4. Inner-ring suburbs are experiencing many of the issues that we once thought were limited to cities. Interestingly, a number of these issues are spreading beyond the inner-ring.

The columnist suggests we need to fight the suburban blight, marked by “separate municipalities outside a city, regardless of age or form…development with a specific pattern, typically built after 1945: single-use zones (stores separated from offices and housing, single-family houses apart from apartments); lots a quarter-acre or more; car dependent.”

There are several other issues that many suburban communities face:

5. Budget crunches with the economic crisis leading to a downturn in housing growth. Not much money is coming in and this will lead to cuts in services and amenities.

6. More suburbs reaching build-out and facing questions about whether denser development can fit within a community dominated by single-family homes.

6a. Will American suburbanites want denser development that may threaten their property values?

7. Increasing minority and immigrant populations that challenge the white majority that has dominate American suburban life. Stories like that of a controversy over a proposed mosque in DuPage County could become more common.

8. Of course, lots of empty houses or homes with reduced values (here or here). This limits people’s ability to move, the ability of communities to collect money, and builders and lenders to make money.

USA Today says McMansions are “out of vogue”

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Citing recent housing figures, USA Today argues that McMansions are “out of vogue”:

Fran DiBello of Cleveland didn’t need a lot of room. For her, a three-story townhome has everything she could need.

“I really like the style of this home,” she says. “It’s very efficient. The appliances, the heat.”

It also has a view of Lake Erie and an 8-minute commute to work. Ten years ago, this neighborhood wasn’t here; 10 years ago, these homes would have been over shadowed by the McMansion.

“A McMansion was a trophy — often times a house with five or six bedrooms when you only needed two,” says Scott Phillips, real-estate agent with Keller Williams in Clevekand.

The median size of homes purchased in 2008, the most recent year for which figures are available, is 1,825 square feet. For first-time buyers it is 1,580 square feet, according to the National Association of Realtors.

A majority of the homes Phillips sells are less than 1,700 square feet.

Some consider it an outgrowth of being green; others see it as people living within their means.

Another shift in housing trends also means a move closer to the city’s core, Phillips says.

Numbers show that 90% of home sales nationwide are to young professionals looking for urban housing.

“People like to live where they’re closer to the amenities, the parks, nightlife, grocery stores,” he says.

The article seems to invoke several meanings of McMansions:

1. A more suburban home. This is contrasted with a desire for more urban homes in these tougher economic times.

2. A large home, a “trophy” where people bought a bunch of space that they really didn’t need. It is also suggested that this is wasteful of both money and resources (not being “green”).

But overall, the real story of the article seems not be about McMansions but about the most recent patterns: a shrinking median size of homes purchased and a rise in demand for urban housing among young professionals. This is contrasted with the “McMansion,” that exemplar of all suburban housing and of American housing excess.

About these newer trends:

1. This article cites the median size of homes purchased in 2008. The typical figures cited for home size is the size of the average new home purchased. This figure is still over 2,400 square feet though this is down a bit from the peak of several years ago. The median size is rarely cited and this article doesn’t provide any comparison so that we would know how this size in 2008 compares with previous years.

2. I also had not heard of this figure that “90% of home sales nationwide are to young professionals looking for urban housing.” This is remarkable if it is true. It suggests that this group is the primary one driving the market and that they clearly prefer more urban living. This corroborates what the National Association of Home Builders has discussed.

3. Is this a long-term trend or will Americans seek larger homes once the economy picks up? See my thoughts here.

Argument: improve educational performance of poor children by moving them to the suburbs

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Academic achievement is a familiar topic in recent American discourse: how exactly do we improve student performance, particularly for those who are behind? One foundation president suggest the answer is to have more poor kids move to the suburbs and attend suburban schools with wealthier children:

One of the most important recent pieces of education research was released last year — and promptly ignored. The Century Foundation’s report “Housing Policy is School Policy” confirms the seminal 1966 finding of Johns Hopkins University sociologist James Coleman: The school-based variable that most profoundly affects student performance is the socioeconomic composition of the school. In short, poor children do better if they attend schools with affluent children.

The “new” news in the report? It highlights the critical out-of-school influence of where the low-income children reside. Poor children attending an affluent school do even better, it turns out, if they also live in an affluent neighborhood.

There is more interesting material in here, including reference to the Gautreaux program in Chicago (see some of the academic research generated in studying this program) that was one of the first programs that moved public housing families to suburban neighborhoods. (However, there is no mention of over similar and bigger programs, like HUD’s Moving To Opportunity.)

As the article suggests, this is a difficult solution to implement. The suburbs tend to have more expensive housing, suburban residents can be resistant to minorities and the lower classes, support networks can be lacking, and transportation by automobile is often required (and is costly). Additionally, it is very hard to create laws that would force movement or impel suburban communities to build affordable housing.

More broadly, this piece is a reminder of the price of segregated housing in America. We have an ethos that says people can move wherever they want (particularly if they have the money) but there are a variety of factors that inhibit this. As American Apartheid suggests, residential segregation “is the ‘linchpin’ of American race relations.”

Let’s hope the “new normal” in housing doesn’t look like Merced County, CA

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A USA Today article about the “new normal” in US housing uses Merced County, California as its main example. The situation there is not good:

The median home price, $116,000, is down 68% from its peak in 2006. Three of five homeowners with a mortgage here owe more on their loans than their houses are worth, compared with about one in five nationally.

While the situation is particularly dire in Merced County, it is also not great in a number of other places:

Nationwide, home prices are down 30% from their 2006 peak. Moody’s Analytics economist Celia Chen says national home prices will regain that ground by 2021.

Some areas will take far longer. In 22 U.S. metropolitan regions, most in California and Florida, home prices won’t return to their 2006 peaks before 2030, Chen estimates. That includes such cities as Miami, Detroit, Phoenix, Las Vegas and Riverside, Calif.

And a USA Today chart shows the counties with the most mortgages underwater: Clark County, Nevada (where Las Vegas is located) is at the top with 71.1% of mortgages underwater. Overall, there are 17 counties over 50% and the top 30 on the chart are all over 46%.

This is a long-term issue for these places, particularly if housing values for the whole country aren’t expected to reach the 2006 peak until at least 2021.

The Katrina Cottage versus the McMansion

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After Hurricane Katrina, there was a need for innovative housing designs in order to quickly rebuild the city’s housing stock. One such design was the Katrina Cottage, a 308 square foot dwelling that was quite portable but was well made and fit with existing architectural themes. The Chicago Tribune asked an employee of an urban planning firm who lives in one of these homes why exactly these homes did not catch on:

Q. You’ve said these little houses have a lot of fans who are attracted to their simplicity and see them as the anti-McMansion. Why didn’t Katrina Cottages catch on?

A. Well, you know, this kind of project would be illegal in most places; building codes restrict room size, and zoning codes restrict lot size. It wouldn’t work in a suburban subdivision; it has to be a small infill development. Dropped randomly into (traditional) subdivisions, the houses look eccentric and experimental.

The reason it works in Ocean Springs is that it’s around similar houses and it’s within walking or biking distance of places to eat and drink, a grocery store, a YMCA, hair salons, barbershop and retail. I rode a bike everywhere and didn’t need a car. If you have easy, walkable access, you don’t need all kinds of stuff in your house.

You see, in a conventional suburban development, they’ve taken an entire town and compressed it into a McMansion — you have the bar somewhere, you have the basement rec room, there’s the TV room, the coffee shop in an espresso machine. There’s a room with workout equipment. In a conventional subdivision, you have to (put all those features into the house) because you don’t have access to anything you can walk to.

There are a few developments based on the idea — there’s Cottage Square, where I stayed. Ross Chapin, a developer in Langley, Wash., builds so-called “pocket neighborhoods” — he’s got people buying 400-square-foot homes for $600,000. And Lowe’s created and still sells plans and kits for (individuals) who want these houses.

Several things are interesting in this response:

1. Conflating all suburban homes with McMansions is a common mistake.

2. The idea that suburban developments don’t want anything too different in terms of design or architecture is accurate. Homes that look too different might just negatively affect property values. On top of this, the idea that many places would find these homes to be illegal seems silly but is likely true.

3. I would be very interested to know what would lead people to pay $600,000 for a 400-square foot home. Check out Ross Chapin’s designs here.

4. You can read more about Ben Bowen’s thoughts here. It sounds like his argument for these small houses includes a certain kind of neighborhood where amenities and daily needs are within an easy walk. These ideas seem quite similar to those of New Urbanism.

Places that might be deserted due to a lack of homebuyers

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The issue (amongst many) in the ongoing economic malaise is a lack of homebuyers. To have a hot housing market, such as happened in much of the 1990s and some of the 2000s, you need both sellers and buyers. What happens if this temporary trend of a lack of buyers turns into something less than temporary?

One suggestion is that certain areas will be deserted:

Many economists argue that the housing market may take four or five years to recover. Even if that’s proven to be true, the all-time highs of 2006 may never be reached again.

The devastation in some regions will never be repaired. Parts of Oregon, Georgia and Arizona have become progressively more deserted. Since jobless rates may never recover, there is little reason to hope that the populations in these areas will ever rebound. Some homes will be torn down in these pockets of high foreclosures in the hopes that reducing supplies will boost prices. Whether that idea will work in hard-hit areas such as Flint, Mich., and Yuma, Ariz., remains to be seen.

If this comes to pass, this would be an interesting period in American history. Yes, we do have some instances of population loss: the “ghost towns” of the Old West come to mind as people poured into a region and then seemed to leave just as suddenly. Rust Belt cities like Detroit and Buffalo and Pittsburgh have been experiencing a slow but steady population drain over the last few decades. And I have tried to find evidence of “lost suburbs” – places that would go against the typical narrative of American suburbs continuing to grow in population and sprawl further out from cities.

But this prediction suggests that certain metropolitan regions might not have any hope of recovery. While some of these are Rust Belt places that already had issues (like Flint), others are newer, particularly locations Nevada, Arizona, and California. As a matter of public policy, what should be done? Should we prop up locations with government aid? Should we write certain areas off and let them slowly lose population until the critical population mass is gone? Is contraction worthwhile (something that has been debated now for several years regarding Detroit) or is simply losing a city or region a better option?

In the long run, the only possible solution seems to be to convince people that these areas are desirable places to live. One selling point, and this seems to come up a lot on the front page of Yahoo, is that these places have affordable housing. This may be the case but that won’t be enough to attract people – these areas need jobs, economic engines that will bring stability and profits to hard-hit regions. And which companies might be willing to step up?

Interestingly, Illinois ranks #5 on this list. It looks like this analysis says the main factors are a limited population growth and a severe loss in manufacturing jobs over the recent decades. Certain areas of the Chicago region seem more immune to this than others. DuPage County is populous and wealthy, partly due to the influx of higher-end, technology-related jobs that have entered the county since the 1960s. Because of this, DuPage County has an unemployment rate always multiple points below the national average.

What Gen Y wants in a home

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This is a headline that immediately caught my eye: “No McMansions for Millennials.” Some discussions at the recent National Association of Home Builders (NAHB) conference focused on the needs of this younger group of homebuyers. Here is a quick summary of what Gen Y wants:

A key finding: They want to walk everywhere. Surveys show that 13% carpool to work, while 7% walk, said Melina Duggal, a principal with Orlando-based real estate adviser RCLCO. A whopping 88% want to be in an urban setting, but since cities themselves can be so expensive, places with shopping, dining and transit such as Bethesda and Arlington in the Washington suburbs will do just fine.

“One-third are willing to pay for the ability to walk,” Ms. Duggal said. “They don’t want to be in a cookie-cutter type of development. …The suburbs will need to evolve to be attractive to Gen Y.”

Outdoor space is important-but please, just a place to put the grill and have some friends over. Lawn-mowing not desired. Amenities such as fitness centers, game rooms and party rooms are important (“Is the room big enough to host a baby shower?” a millennial might think). “Outdoor fire pits,” suggested Tony Weremeichik of Canin Associates, an architecture firm in Orlando. “Consider designing outdoor spaces as if they were living rooms.”

Smaller rooms and fewer cavernous hallways to get everywhere, a bigger shower stall and skip the tub, he said. Oh, but don’t forget space in front of the television for the Wii, and space to eat meals while glued to the tube, because dinner parties and families gathered around the table are so last-Gen. And maybe a little nook in the laundry room for Rover’s bed?

A few thoughts about these findings:

1. Proponents of smart growth, such as New Urbanists, should be happy. It sounds like the younger generation wants to live in more urban areas with more amenities and less sprawl.

1a. Is this want they will want in the long-term or is primarily an after-college thing? What happens when they have kids? What happens when they have more money?

1b. Are there enough housing units that fit these descriptions? I could see these falling into two camps: expensive places in trendy neighborhoods or cheaper places in rougher or neighborhoods earlier in the gentrification process.

2. Putting the word McMansion in the headline to describe the homes of a previous generation is an interesting choice. What exactly is meant by “McMansion”? Overall, it seems to be used as a term for all suburban homes. But then we get some subtleties of the term: cookie-cutter design, yards, jacuzzi tubs, lots of space, spread out. But to suggest that all suburban homes are McMansions seems to betray more of the headline-writer’s thoughts on suburban homes than it does to actually reflect reality. Just how many suburban homes are McMansions anyway – we don’t really have way to count this.

3. People at the conference discussed features of a housing unit that would allow it to be more social: bigger interior entertainment spaces, using outdoor spaces as entertainment spaces, etc. Does this suggest that this generation is blurring the line between the community and the home more so than previous generations? The characterization for decades of many suburban homes is that people drive out of the garage in the morning, drive back in at night, and barely interact with anyone else. Will these sorts of denser spaces lead to more community among Generation Y or will they simply use their entertainment spaces to interact with already-established friends?