Asking for advice: my parents keep renovating their McMansion, my sister and I have debts

Would those who spend money renovating their McMansions be better served by helping their adult children with that money? From the one seeking advice:

My parents (mom and stepdad) are in their 70s, retired, healthy, and doing well financially. They spend their money on traveling the globe and constantly remodeling their new Florida McMansion. That’s fine. They can spend their money on whatever makes them happy…

My sister had joint-replacement surgery and has high medical bills. I am going through a legal fight with a previous employer, am unemployed for the first time in my life (I’ve had a job since I was 14), and legal bills are eating my 401(k). Our parents know the details. We’re not asking for any help.

But I don’t want to get on the phone with my mom and have to hear all the issues of remodeling rooms that looked perfectly fine when I visited a year ago. Plus they don’t even ask how things are going with their children and grandchildren. It’s all talk about superficial things and how awesome they are doing.

Advice columnist responds:

But let’s back up for a second. You’ve presented this as a two-item menu: either endure your mom’s affluenza, or stop calling your parents.

There’s a middle choice, though: truth. “Mom, [sister] and I are buried in legal and medical bills. I can’t sympathize over expensive renovations.”

It does not sound as though the McMansion is the actual problem. Yes, the letter writer is upset because the mom both spends money on their McMansion (which, in the letter writer’s opinion, does not need more work) and then spends a lot of time talking about it. But, it seems as though the McMansion could be replaced by a number of objects or hobbies associated with people with resources. It could be golf, fixing up old cars, buying collectible items, playing bridge, or any number of things that, according to the letter-writer, keep the mom from paying sufficient attention to her kids.

At the same time, the McMansion is a potent symbol here. Since it is such a pejorative and loaded term, it leads readers toward a particular kind of person: one with poor taste in architecture, lots of money, and an interest in flaunting their status through their home. Additionally, who would prioritize their expensive home over the real needs of their children? These are not just parents who happen to live in a McMansion; these are unlikable McMansion owners.

Are McMansion owners on the whole more generous with their family? Do they have money to spare and give it away? Others have argued McMansions are bad for children; it is not clear from this letter whether the advice seeker grew up in this home. Could a whole generation of Americans reveal hurts produced by or in McMansions? Even with the attention they receive, widespread tales of childhood McMansion woes are unlikely given the actual number of McMansions in the United States.

Suburbanites in wealthier areas are not all wealthy and can be Democrats and identify as working-class

The recent victory of Alexandria Ocasio-Cortez in New York’s 14th House District has led some to question her background:

Ocasio-Cortez was born in 1989 to parents Sergio Ocasio-Roman, who was born in New York City, and mother Blanca Ocasio-Cortez, a native of Puerto Rico.

Her father, who tragically died from lung cancer in 2008, was an architect and the CEO of Kirschenbaum & Ocasio-Roman Architects, PC, which focused on remodeling and renovations…

Initially, the young family lived in Parkchester, a planned community of 171 mid-rise brick buildings in the Bronx.

When she was about five, Ocasio-Cortez’s family moved to the house in Westchester County, a detail that the bio omits.

The timing of the move is confirmed in a New York Times interview with mother Blanca Ocasio-Cortez, but the report does not address the discrepancy.

The home, a single-story with a finished basement, most recently sold for $355,000 in 2016. The median annual income in the area is $116,741, compared to the median annual income of $48,315 in Parkchester’s zip code, according to the latest Census data…

Her father’s death came amid the financial crisis and he left no will, putting their home on the brink of foreclosure, she has said.

The house was sold and Ocasio-Cortez now lives in the same Bronx apartment where she lived until age five.

I do not know all the details of Ocasio-Cortez’s background. The goal of the article above seems to be to suggest she is not quite the person she presents herself as and instead grew up in relatively privileged settings. Yet, her own descriptions are not necessarily out of character with what actually is taking place in suburbs today:

  1. Not everyone who lives in the suburbs is wealthy or even middle-class. Westchester County is historically a wealthy county outside of New York City. Yet, like many suburban counties that have experienced increased populations of poorer residents and non-white residents, there is more variety in social class and race and ethnicity in Westchester County than people might think. According to the Census, the county is only 53.4% white alone, 24.9% Latino, and 16.5% black. The median household income is over $86,000 but 10.0% of residents live in poverty. In other words, not everyone in Westchester County is a wealthy white person and some residents are more working-class (by certain measures or by self-identification).
  2. A common argument in the postwar suburban boom was that residents of cities would move to the suburbs and become staunch Republicans. This may have been true in some locations, particularly wealthier suburbs. However, the suburbs are now more diverse politically with numerous political battles depending on suburban voters. Suburbs closer to cities now lean toward Democrats while suburbs further out lean toward Republicans. Good numbers of American suburbanites are Democrats.

In other words, suburbs are now often diverse. Long-standing understandings of wealthier and whiter counties, whether Westchester County or DuPage County, might take time to change.

Not needing “for sale” signs in wealthy suburbs

The Connecticut suburb of New Canaan is testing banning “for sale” signs:

The “trial ban” on real estate signs will run from July 1 to Jan. 1, according to Janis Hennessy, president of the New Canaan Board of Realtors.

The decision was made by members of the Board as well as the New Canaan Multiple Listing Service, “to further improve our already beautiful town,” Hennessy said in a release…

“Millennials and other potential buyers shop for real estate online and we believe they will be able to find New Canaan homes without these signs. We have seen how eliminating the signs has improved the look of other towns in Fairfield County without impacting the real estate markets. New Canaan Realtors believe it is worth a try here in the ‘Next Station to Heaven’ as well.”

The question of whether to implement a ban, such as a longstanding one in Greenwich, has been battered around New Canaan for some time. Saying the sheer number of ‘For Sale’ signs undermines the town’s attractiveness and ability of some property owners to sell, advocates for the change are cheering the decision.

There are four explanations provided or hinted for why “for sale” signs will not be allowed for six months:

  1. Younger homebuyers do not go driving around looking at homes; they look online.
  2. Other suburbs nearby already have a ban in place. New Canaan needs to keep up.
  3. Not having the signs makes the properties more attractive.
  4. There are too many “for sale” signs.

There may be a single underlying reason behind these explanations: the higher social class of residents in New Canaan. “For sale” signs may be gauche in a community that is one of the wealthiest zip codes in the United States (with Greenwich also as one of the wealthiest zip codes). Selling and buying property in a wealthy community does not have to be such a public event. The crass exchange of money for property is essential to American life but may be too prosaic to acknowledge in a place where residents could live in a myriad of places. Not making the sale as public (no signs plus pocket listings and listing only in certain places) may just add to the cachet of the community.

In a place where there are no “for sale” signs and where there may be limited community interaction (one of the findings of The Moral Order of a Suburb), there may be few indications that a property has changed hands. The cars in the driveway may change a bit and home repairs may happen here and there but the single-family homes may be more permanent than residents.

Wealthy Americans: “Zip code is who we are”

I would argue this is not just true of “the new American aristocracy“; where people live has a significant impact on their lives.

Zip code is who we are. It defines our style, announces our values, establishes our status, preserves our wealth, and allows us to pass it along to our children.

On an everyday basis, living in a certain location could affect these aspects of life:

  • social networks and local relationships with different groups of people (race/ethnicity, social class, similar interests)
  • schools
  • access to jobs
  • other local amenities such as community services, recreation, shopping
  • health

Now, the upper class may use their zip code in unique ways. The full paragraph that includes the excerpt at the beginning of the post suggests the zip code becomes a way to keep others out:

Zip code is who we are. It defines our style, announces our values, establishes our status, preserves our wealth, and allows us to pass it along to our children. It’s also slowly strangling our economy and killing our democracy. It is the brick-and-mortar version of the Gatsby Curve. The traditional story of economic growth in America has been one of arriving, building, inviting friends, and building some more. The story we’re writing looks more like one of slamming doors shut behind us and slowly suffocating under a mass of commercial-grade kitchen appliances.

This has been happening for decades in the United States as residents of particular races and ethnicities (primarily whites) and social class (primarily the middle and upper classes) had various mechanisms, now some illegal and others more nebulous (such as exclusionary zoning), to keep those they did not like away from their residences. And this will likely continue for decades more, perhaps particularly for the top 10%.

Determining who is super-rich, private banking edition

Categorizing people into different income groups is an interesting exercise for social scientists but it may be necessary for certain occupations. Take private bankers as an example:

Call it economy-class rich. Business class? That’s $100 million. First class? $200 million. Private-jet rich? Try $1 billion…

The measure of what makes someone rich has changed dramatically in the past two decades. In 1994, when Peter Charrington, global head of Citi Private Bank, first joined the firm, “Three million was largely considered ultra-high net worth across the industry,” he recalled. “Fast-forward almost 25 years, and $25 million is how we define ultra-high net worth.”…

Placing investable assets of at least $25 million with a wealth manager—and clients with that amount or more tend to work with a few firms—can bring access to initial public offerings, and having at least $5 million in investments moves a client past one regulatory hurdle to taking part in private offerings…

It’s direct investment in companies and buildings where the line between the rich and seriously wealthy is most pronounced. “This is a threshold differentiator among the world’s wealthiest, compared to the merely very wealthy, let alone the 401(k) investor,” said J.P. Morgan Private Bank’s Duffy. “These very large families are investing in private companies, owning a percent of the company versus a share of a public entity.”

On one hand, $25 million is pushed as a rough cut-off line but, on the other hand, there are some fine gradations both above and below this level. Does the quest to differentiate oneself in terms of resources as well as to offer different levels of service to such people ever end? (Presumably it must stop with the wealthiest people in the world but then there may be a quest to keep pushing those number upward.)

Another piece of this that is worthwhile to consider is the true sign of wealth is to buy into capital or the “means and modes of production.” It is one thing to own objects or investments and it is another to own significant stakes in companies and buildings. For example, the growth machine model of urban development would involve these super-rich individuals who the clout and resources to influence and direct development.

Where is the evidence? McMansion owners “favor” Cadillac Escalades

The connections between SUVs and McMansions continue: this article features a list of traits of Cadillac Escalade owners and their favored kind of housing.

The Escalade has long dominated the Navigator both in sales and cultural currency. Check out this list of Ten Seriously Dope Cadillac-Inspired Hip Hop Tracks. Indeed, the Escalade has long been a favored ride of the hip-hop crowd, pro athletes, Wall Streeters, business owners, drug kingpins and “McMansion” owners…

Who’s buying these hulking SUVs, according to the data? Rebecca Lindland, senior analyst for KBB.com, says it’s more than just the bling and business tycoon sets. “The Escalade and Navigator shoppers on kbb.com are very similar, leaning heavily toward a domestic, family-oriented mindset. But the Escalade buyer tends toward techie side, so if the new Navigator is stacking up well against Escalade on the telematics interface, Cadillac could have its hands full.”…

The market for large luxury SUVs is as well established as cigars, expensive brandy and coal furnaces. Even these harsh words from Consumer Reports can’t dampen the enthusiasm for these vehicles among the rich and brash. “This hulking SUV can comfortably accommodate seven, effortlessly tow more than 4 tons, and practically cast the shadow of the Queen Mary II. While the Navigator pampers you with power everything and a rich interior ambience, a few details detract from the idea of embracing this almost $90,000 behemoth.”

That people of different class statuses purchase different brands and models is well-established, going back to the General Motors brand for every buyer as well as more academic studies showing different tastes among different social classes. What I would want to see in this case involves something more: where is the data that shows McMansion owners favor Escalades over Navigators? Or, that people who own Escalades are more likely to live in McMansions than other kinds of homes?

This is not the first time McMansions have been connected to Escalades. For example, take the New York Times. From a July 2001 story:

There are those who are drawn to the Escalade simply because it is so far over the top. You see them pulling up to McMansions in the suburbs and to hip-hop clubs downtown, making a statement before the truck comes to a halt. On the flip side, it is not hard to find people who are appalled, sometimes with fanatical fervor, by what the Escalade represents. Glaring from subcompacts or crosswalks, they seem to hold this hulk of metal responsible for global warming and dolphins in tuna nets.

Or an October 2005 review of a Lincoln SUV subtitled “A McTruck for the McMansion“:

The Mark LT is priced thousands below its prime competitor, the Cadillac Escalade EXT, but the equipment list shows why. The Caddy has 45 more horsepower and comes only with full-time four-wheel drive. (Lincoln’s system is part time, and costs extra.) Lincoln doesn’t offer a navigation system, air-conditioned seats, traction assist, stability control or power folding mirrors. Its power seats have manual recliners.

Or a January 2014 story titled “In Housing, Big is Back”:

Affluent buyers are drawn to new homes in part because the market for existing homes is so competitive, said Stephen Kim, a Barclays analyst. Inventories of existing homes for sale remain low, and buyers are less interested in large homes in far-flung developments — the McMansions of the exurbs that were emblematic of the boom and bust…

In April 2012, they selected a model costing about $850,000 from a luxury builder and chose a number of standard options for an additional $650,000. Ms. Sleep, who was in the process of selling the software firm she founded nearly two decades earlier, added a wall of windows to the basement and furnished it with a pool table, a media room, a wet bar, a home office and a suite for their youngest daughter to use when she was home from college.

They added a second master bedroom suite, on the ground level, for use when they are older and stairs become tougher to climb. They upgraded floors, carpeting and molding, added a sunroom and a large deck and supersized the garage door to fit Ms. Sleep’s Cadillac Escalade. The home’s lighting and temperature, as well as media on any of 14 televisions and the sound system, can be controlled remotely.

I get that it takes a certain amount of wealth to own either an Escalade or McMansion – and linking McMansions to wealthy people is common – but I have yet to see more evidence that McMansion owners prefer Escalades.

McMansion as a symbol of wealth in America

A Washington Post review of a new book on social class suggests McMansions help illustrate class differences:

Its influence begins before birth and holds sway beyond the grave. It can determine who goes to prison and who goes to the Ivy League, who drinks bottled prestige water and who swigs from a foul tap, who rents rooms and who rattles around in a McMansion…

Fraser uses iconic events, documents and images from American history as his raw material for six essays on why class matters. The reality of class — not just patterns of consumption and markers of wealth and privilege, but raw power — had largely been expunged from our national vocabulary by political elites pushing the American Dream, he argues. But the dirty secret of class emerged a decade or so ago in the unequal wreckage of the global financial meltdown, he contends.

Throughout the use of the word McMansion from the late 1990s to today, it has often been used in this way: to symbolize the wealthy in America who can purchase and live in large new homes. At the same time, it is a little less clear what strata of Americans can live in McMansions. Is this the top 20%? The 1%? The “Dream Hoarders“? This depends somewhat on the metropolitan region as McMansions can differ significantly in size and price but I would guess McMansions are for those in the top 10-30% of American earners. Those who earn less cannot live in such a home while those above that level would not not want to be associated with McMansions and/or have enough resources to access even better housing.

At a broader level, where one can live is an excellent marker of social class: it hints at the wealth the homeowner has (it takes a certain level of wealth to purchase any home), the neighborhood or community in which the home is in hints at relative status, and the size and features of the housing is often taken to say much about the resident. A McMansion owner has a certain lifestyle and status.