Tag Archives: housing

The Not So Big House in the Chicago suburbs

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Architect Sarah Susanka has made a name for herself by writing about the Not-So-Big House. In this, Susanka advocates for smaller homes with custom features that fit the personality of the inhabitants. Instead of buying a cookie-cutter McMansion or tract home, Susanka would have you design a slightly smaller home that better fits your needs.

A new development in Libertyville, a northern suburb of Chicago (about 40 miles north of the Loop), will feature four of Susanka’s homes. Here is a description of the price and size of these homes:

SchoolStreet will have 26 homes in a “new urban” design, plus condominiums in the historic Central School. The single-family homes range from $500,000 to $700,000 and 17 homes have already been sold.

Susanka is designing one floor plan of about 2,200 to 2,400 square feet with four fronts, so four could be built in the community. McLinden says the bungalow-style model or showcase home will be completed and open to the public next fall. It will stay open for six months because the architect thinks the only way for most people to really understand her principles is to walk through the spaces. McLinden hopes to build homes like it in future communities, too.

“This is just the beginning,” said Susanka. “We both are doing this as a test drive to see if there really is a market here.”

It is interesting to note that these homes are not cheap (though they may be slightly smaller). The money in these homes will go to certain features that mark Susanka’s designs:

Vary the ceiling heights. This provides the intimacy and feeling of personal space that some say is missing in big-box McMansions with all tall ceilings. Builders might try this with tray ceilings — at an extra charge, said Susanka.

Create sheltered spaces. Frank Lloyd Wright had his inglenooks or seating areas around fireplaces. Susanka puts a library alcove off the living room.

Make spaces do double duty. The library alcove works as a formal dining area.

Light to walk toward. This means put a lighted something, such as a window or lighted painting at the end of a hallway or other vista. “It provides a sense of extension. It feels like it’s longer than it actually is, and people experience more space.”

Don’t forget the “away” room. This can be an office or first-floor bedroom, of course, or a room for adults to read, do crafts or entertain friends. Or maybe the messy little children can use the away room, leaving the main living areas in better shape.

Speaking of messy youngsters, the home will have a laundry room that’s about 11-by-12 feet. “It can be a craft room for the kids — let the paint fly,” said the architect.

The author-architect is willing to explain and describe her homes, but she believes nothing compares with seeing them in real life.

“I’m trying to make as simple as possible a set of ideas that in a way are complex,” she said. “We are used to thinking about design in two dimensions. The quality of the space has to do with the third dimension, the heights and shapes of the space.”

Multiple times in this article, Susanka and the developer suggest these homes must be experienced in order to understand how all of these pieces come together. I would be curious to tour one of these houses myself to see if it really does feel different to a typical home, even in a quick walk-through. I have looked through a number of her books and have most enjoyed seeing pictures of cozy reading spaces.
I would also be interested to know who is attracted to these homes rather than typical new homes. People with greater appreciation for aesthetics and design? People with higher levels of education (Bourdieu’s theory of distinction)? People looking for the “hot” yet suburban neighborhood?

An argument for why we should be hearing more about falling home prices

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The last several years have seen many stories published and produced about homes and home values. But Dan Froomkin argues that we should be hearing even more about how home values continue to fall:

You might not know it from reading the news, but the nation’s housing prices are in free fall again…

Despite the fact that the nation is officially in a period of economic recovery, the latest data show that home prices are diving. One recent survey pegged the decline at 0.7 percent per month; another found prices down 5.8 percent between August and October.

One analysis found  home values will likely drop more than $1.7 trillion this year, on top of the $1.05 trillion drop in 2009. That would bring the loss in wealth to $9 trillion since the June 2006 market peak, when the housing stock was valued at about $24 trillion…

Dean Baker, co-director of the liberal Center for Economic and Policy Research, tells me the story isn’t getting nearly as much coverage as it should — if nothing else because “as you see a drop in home equity, you also see a drop in consumption.”…

What that means is that another trillion-dollar loss in housing wealth — something that could easily happen by next fall — translates to $50 billion to $70 billion less consumption; sort of an anti-stimulus.

This is obviously not good news. I wonder what Froomkin would say the value is in having Americans hear this story more often and with more emphasis: would people be moved to act in certain ways, like making requests of politicians to do something or trying to get out of homeownership?

A link is made in this story between home values, consumption, and jobs. So if this is a vicious cycle that involves these three factors, where do we begin in trying to reverse the trend? With tax cuts – or extensions of tax cuts? It sounds like the one issue that would help out the others is jobs. If more people had good-paying and stable jobs, they would spend more overall and some of these issues of home values wouldn’t be as much of a concern.

h/t Instapundit

Lower levels of segregation in many cities according to the American Community Survey

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Residential segregation, primarily between whites and blacks, is a critical issue when considering the historical development and current state of American development patterns and way of life. But new findings from the most recent American Community Survey (the Census Bureau’s yearly survey) suggest that segregation levels have decreased in many cities:

Atlanta is one of several predominantly Southern and Western cities that showed a noticeable integration trend over the last five years as both middle-class blacks and whites moved into each other’s neighborhoods, according to the Census Bureau’s American Community Survey of 10 million Americans, released Tuesday…

Seventy-five percent of the largest 100 US metro areas showed neighborhood segregation rates slipping to levels not seen for more than a century…

Ethnic integration failed to show the same kind of gains…

It isn’t that the North, which has lagged behind the South and West in integration rates, has dramatically different attitudes on race. Rather, new housing and job opportunities in the South and West have helped to spur integration there.

This is interesting, and potentially uplifting, news. A number of sociologists have called attention to this issue in recent decades, perhaps most notably in American Apartheid published in the early 1990s. Recent maps show that many cities have a highly visible divide between different population groups. With these recent findings, the question may now be: how much more integration might we see in American cities? Is this a short-term trend or is this indicative of a slow, steady rise of integration in American cities?

What I would like to see is a more specific breakdown of what cities improved on integration and which did not. The article suggests that cities in the South and West had increasing rates of integration while segregation decreased less in the North. This is a reminder that in American cities, segregation has been more prominent in northern cities, what scholars (according to the article) call “the ghetto belt.” Are there lessons from the cities that improved in integration that can be exported to other cities?

Additionally, how have segregation/integration rates changed in suburbs or perhaps in whole metropolitan regions?

Reduced American mobility

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One of the hallmarks of American life in the last 60 years is the incredible mobility. Even a few years ago, the average American family moved every 5-6 years.

But this has changed with the recent economic downtown:

“We’re seeing one of the lowest mobility rates in a century,” says Nathaniel Karp, chief economist for banking firm BBVA Compass. Karp says the recession has forced many people to stay put because they are unable to sell their homes, cannot find jobs or are unwilling to relocate for work if it means sacrificing a partner’s stable position.

The slowdown makes the question of who’s moving and why even more significant than in years past.

If people can move frequently, it leads to people being able to move to where the jobs are available, it means that the housing market has more people who are selling and buying, and it influences the middle-class and above ethos that you can determine your own destiny.

This psychological feeling that movement is possible might have a profound effect if the mobility rate stays low. In recent decades, the decently educated and paid American could expect that they would come out of school, move to where a job was available, move up to a house, and then continue a cycle of better job leading to better house and then going to a better job and so on. But this has changed somewhat: college graduates are returning home more frequently and there are many who are stuck in houses where they owe too much money.

Overall, this would impact what it means to be middle class: it would still lead to having certain levels of education and consumption but it wouldn’t mean the greater “freedom” of being able to move where one wants to.

How winning on minor technicalities can lead to a 25 year foreclosure battle

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As lenders have recently had to slow down the foreclosure process because of running into trouble for not properly following procedures, the Wall Street Journal reports on another cautionary tale: one woman in Florida has stretched out her foreclosure for 25 years, not making a payment since 1985. According to the story, this has happened because the woman has been able to make successful arguments in the courts:

She has managed to stave off the banks partly because several courts have recognized that some of her legal arguments have some merit—however minor. Two foreclosure actions against her, for example, were thrown out because her lender sat on its hands too long after filing a case and lost its window to foreclose.

Ms. Campbell, who is handling her case these days without a lawyer, has learned how to work the ropes of the legal system so well that she has met every attempt by a lender to repossess her home with multiple appeals and counteractions, burying the plaintiffs facing her under piles of paperwork.

She offers no apologies for not paying her mortgage for 25 years, saying that when a foreclosure is in dispute, borrowers are entitled to stop making payments until the courts resolve the matter.

“This is every lender’s nightmare,” says Robert Summers, a Stuart, Fla., real-estate lawyer who represents Commercial Services of Perry, an Iowa-based buyer of distressed debt that currently owns Ms. Campbell’s mortgage and has been trying to foreclose. “Someone defending a foreclosure action can raise defenses that are baseless, but are obstacles for the foreclosing lender,” he says, calling the system “an unfair burden” for lenders.

I don’t know if the system is “unfair” for lenders but it is remarkable that the woman is openly guilty about not making a payment and yet is still able to win in court. Could lenders be this bad on following procedures? Or is the law really this in favor of people who haven’t made mortgage payments?

Measuring the popularity of tiny houses

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I enjoy looking at pictures of tiny houses, those abodes with around 100 square feet. Perhaps it has something to do with my interest in home designs or my liking of cozy places or thinking about how Americans are finding alternatives to buying large homes.

But it is difficult to get a handle on exactly how many people like these houses or actually decide to buy them. One thing is sure: it is a small number of people. But this story suggests the number of people interested is on the rise:

Tumbleweed’s business has grown significantly since the housing crisis began, Shafer said. He now sells about 50 blueprints, which cost $400 to $1,000 each, a year, up from 10 five years ago. The eight workshops he teaches around the country each year attract 40 participants on average, he said…

Since the housing crisis and recession began, interest in tiny homes has grown dramatically among young people and retiring Baby Boomers, said Kent Griswold, who runs the Tiny House Blog, which attracts 5,000 to 7,000 visitors a day…

Gregory Johnson, who co-founded the Small House Society with Shafer, said the online community now has about 1,800 subscribers, up from about 300 five years ago. Most of them live in their small houses full-time and swap tips on living simple and small.

Johnson, 46, who works as a computer consultant at the University of Iowa, said dozens of companies specializing small houses have popped up around the country over the past few years…

He said his small houses, which sell for $20,000 to $50,000, are much cheaper than building a home addition and can be resold when the extra space is no longer needed. His company has sold 16 houses this year and aims to sell 20 next year.

These numbers are small – and anecdotal. Even with this rise in popularity, there are still few people interested in selling or buying tiny houses. Are there enough people here to declare that there is a “tiny house movement”? Why not include figures about how many people have joined Facebook groups having to do with tiny houses?

While the popularity of these homes might be indicative that more Americans are interesting in downsizing, the better figure to look at is the average size of the new American single-family home. Taking into account national data, this figure dropped this year and suggests that houses across the country are becoming slightly smaller (or at least reversing the trend of always getting bigger).

The long process of foreclosure: an average of 492 days

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Even though Black Friday sales may have been decent, housing is still lagging. Another indicator: “the number of days since the average borrower in foreclosure last made a mortgage payment” is 492 days. The Wall Street Journal adds more about this figure:

In recent months, the number of borrowers entering severe delinquency — meaning they missed their third monthly mortgage payment — has been on the decline, falling to about 700,000 in October, according to mortgage-data provider LPS Applied Analytics. But it’s still more than double the number of foreclosure processes started.

As a result, banks are taking progressively longer to foreclose. The average borrower in the foreclosure process hadn’t made a payment in 492 days as of the end of October, according to LPS. That compares to 382 days a year ago and a low of 244 days in August 2007…

Speeding up the process won’t be easy, as demonstrated by the banks’ continuing legal troubles related to robo-signers, bank employees who signed foreclosure affidavits without properly checking the required loan documentation.

Millions of Americans still are paying their mortgages even though they owe more than their homes are worth. The more banks’ backlog grows, the more likely they are to join it, adding to the already giant pile of foreclosures weighing on the housing market.

In my mind, one of the issues is that we don’t really know the true state of the housing market until all of these foreclosures go through. And if the average length is more than a year, it is going to take a long time to get all of these through the system, let alone deal with new foreclosures.

I wonder if the length of foreclosure differs by location. In areas that were hard hit by foreclosures, like Las Vegas or parts of California, are the banks ahead or behind in regard to these 492 days? Are there areas of the country where it is in the banks’ interest to slow down the foreclosure process because they can’t really do anything with the houses anyway?

h/t Instapundit

Prolonged housing issues: one-third of Chicago homes underwater

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The housing crisis of recent years is not just about foreclosures. The loss in housing value across the board means that many homeowners with mortgages owe more on those mortgages than their house is worth. This is a common occurence in the Chicago region where new data suggests one-third of homes are underwater, a rate almost ten percent higher than the national average:

Some 32.9 percent of all local single-family detached homes with mortgages were underwater in September, meaning the homeowners owed more on the loans than the properties are worth, according to new data from realty Web site Zillow.com. That compares with 30.9 percent in June and 27.2 percent in September 2009. The report does not include data on condominiums.

Nationally, 23.2 percent of homes have negative equity.

“Negative equity is going to continue to cast a pall over the housing market for the next several years,” said Stan Humphries, Zillow’s chief economist. “All these people are trapped in their homes and can’t move onto another one and it’s throwing off more foreclosures. For people who are not going to move anytime soon, it is much more of an academic issue. For people who need to move or who encounter an economic issue, it’s a material issue.”

I haven’t seen too many people speculating about the social consequences of this. Americans in the last 60 years have been fairly mobile people but these sorts of mortgage situations limits that. This may have consequences for job markets; even if there are jobs available elsewhere, fewer people are then able to pick up relatively quickly and move. On the other hand, it may lead to increased “feelings or perceptions of neighborhood” as more residents have to stay put longer than they would have even just five years ago.

Lake Forest debates affordable housing

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Lake Forest, Illinois is one wealthy suburb: according to the latest Census estimates, the suburb of 18,757 people has a median household income of $139,765 and owner-occupied homes are worth a median value of $900,000. The Chicago Tribune reports on some recent arguments over a small affordable housing project in the suburb – note, the suburb currently has about 7,188 housing units and one existing affording housing project with 5 units:

Five years ago, Lake Forest created an affordable-housing plan, acknowledging that high property values in the community were shutting out some seniors, families and education and health care workers, people who are “part of the fabric of daily life in Lake Forest,” from homeownership.

Almost two years ago, the city began working with the Lake County Residential Development Corp. to come up with a plan to construct affordable housing on less than 3 acres of city-owned land.

Last month, the City Council voted down the Settler’s Green project and directed its housing trust to modify the plan, which would have brought one market-rate and 15 affordable single-family rental homes to the northwest corner of Everett and Telegraph roads. In doing so, Lake Forest walked away from $6 million in Illinois Affordable Housing Tax Credits.

On one hand, it is good that the community is thinking about this issue. On the other hand, when push comes to shove in terms of approving even a small project on just 3 acres of land with 15 affordable housing units, people do not want the project. Additionally, the affordable housing project seems to have been aimed not at lower-income or minority residents but rather at “some seniors, families and education and health care workers.”

Some other figures suggest that Lake Forest needs more than just 5 units of affordable housing – there are plenty of workers in the area who make little money but need housing:

Last year, in a presentation to the Metropolitan Planning Council, Morsch noted that more than two-thirds of the work force in Lake Forest, Highland Park, Northbrook, Deerfield and Highwood earns less than $50,000 a year, meaning they can afford only 3 percent of the local housing stock.

It would be easy to categorize this as another case of NIMBY where citizens in the well-off community just don’t want land to be used in a way that is inconsistent with what already exists. But, this is not just an issue in Lake Forest. There are some deeper issues involving social class and race embedded in this issue of affordable housing in the suburbs.

Another consequence of financial crunch: public housing repairs

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The New York Times reports that public housing repairs have fallen even more behind due to the financial crunch affecting many governmental bodies: “Public housing is falling apart around the country, as federal money has been unable to keep up with the repair needs of buildings more than half a century old.”

While the story goes on to address particular cases in Baltimore and New York City, it’s hard to know from the story about how much of an issue this is. How much worse is the issue compared to five years ago? The only figure cited about a national figure for repairs was derived from a 1998 study. In Chicago over the last few decades, public housing repairs were frequently behind and more funding was requested even when economic times were good.