Richard Florida
by Richard Florida
Fri Apr 20th 2007 at 5:33pm UTC

Rise and Fall of the House?

House_2
Over at Slate, they’re excerpting Witold Rybczynski ‘s new book which follows the making of new residential subdivision. Here he discusses why we live in
houses in the first place.

“Many things—government policies, tax
structures, financing methods, home-ownership patterns, and
availability of land—account for how people choose to live, but the
most important factor is culture. To understand why we live in houses,
it is necessary to go back several hundred years to Europe. Rural
people have always lived in houses, but the typical medieval town
dwelling, which combined living space and workplace, was occupied by a
mixture of extended families, servants, and employees. This changed in
17th-century Holland. The Netherlands was Europe’s first
republic, and the world’s first middle-class nation. Prosperity allowed
extensive home ownership, republicanism discouraged the widespread use
of servants, a love of children promoted the nuclear family, and
Calvinism encouraged thrift and other domestic virtues. These
circumstances, coupled with a particular affection for the private
family home, brought about a cultural revolution. People
began to live and work in separate places; children grew up with their
parents (rather than being apprenticed to strangers, as before); and
the home, securely under the control of what we would now call the
“housewife,” was restricted to the immediate family. This intimate
domestic haven was always a house. Seventeenth-century Dutch cities and
towns were composed almost entirely of houses built in rows, side by
side, wide or narrow depending on the wealth of the owner.”

The rest is here.

While most people take the single family house for granted, I’m not so sure it’s here to stay. Houses simply do not fit in very well with the demands for flexibility, mobility and continuous innovation in the creative economy.  They cost a lot and suck up a ton of capital – a significant percent of gross fixed investment and overall gross national product which could be used for other more productive activities.  They are energy sinks and most people and families don’t use or need all that space.  They’re environmental disasters.  They’re bulky, can’t be moved, and take a long time to buy, rennovate or sell. There is a growing body of economics research which suggests home ownership is associated with lower rates of productivity, lower incomes, and higher rates of unemployment. Density breeds innovation

My sense is we’ll eventually have to invent a new form of housing for the creative age. Not just higher density or more apartment like. I think ownership is a big part of the problem, so it will have to give. Take cars for example. When I was young virtually anyone who wanted to a car had to buy it. Now more and more people lease. They pay less, have a new car to drive, and can change when they want to.

It’s only a matter of time until new forms of high-end leasing are coming to the residential real estate industry. Sure, lots of people buy houses because they want to own, but others do it because they simply can’t get what they want on the rental market. So they buy, design and rennovate to get the kind of home they desire. And despite the recent speculative boom, housing ain’t such a terrific investment.  Many are now arguing that is now a much better deal to rent than to own. What if residential real estate companies took a cue from commercial real estate developers and started tailoring houses to buyer’s specifications, changing kitchens, baths, and decor to suit.  The market is out there. Heck, something like this is already happening in high-end markets like Manhattan and Miami Beach.

Such a system would contribute considerably to overall economic efficiency beyond housing. It may be well that the era of the house is already past.

7 Responses to “Rise and Fall of the House?”

  1. Brian Says:

    Not to mention peak oil. James Kunstler suggests that all those people who have all their equity tied up in their homes and commute 28 miles to work each day will be kind of up a creek if and when it becomes prohibitively expensive to drive. He agrees with you and suggests that the suburban house may have had a nice 70 year run, but that it probably is played out. Whether Americans like it or not.

  2. Michael Wells Says:

    A lot of things mixed together here.

    In cities, we don’t just live in houses, we live in neighborhoods. Buying an existing single family house in a neighborhood is different than building a new subdivision of oversized car-oriented mansions. Portland and Seattle are cities fairly high on the density list that have lots of single family homes in close-in neighborhoods. Jane Jacobs talked about the necessary mix of longtime residents and turnover for healthy neighborhoods.

    As an investment houses may not perform as spectacularly as stocks, but even if values go down you still have a place to live. Some people like my wife love to garden and decorate without having to get permission. Home ownership might tie you to a place you can’t afford to leave like Detroit or Cleveland, and therefore lower income and higher unemployment — but in the “Superstar Cities” with high creative class rates this isn’t generally a problem.

    On the other hand, the boom in Portland and many other places now is high-rise condos which give ownership without the homeowner hassles, and close in to downtown. The high end ones give you a loft or floorplan, then let you decide what you want to have in terms of kitchen, etc. One of my best friends sold their house a couple of years ago to rent and I worried, but maybe it wasn’t such a bad move.

    I think you’re onto something about the market for more choices, in design, in ownership/leasing forms, in usage. Group living and extended families are making a comeback partly driven by immigrants who have different housing traditions and maybe 3 families buy a large house together, and partly driven by adult children and declining parents moving in with middle aged couples. The land-trust concept where you buy the house but the trust owns the land. Maybe primary home time-shares, not just for vacations? I suspect there will be more innovation and forms we haven’t thought of yet.

    Two other thoughts. There need to be new forms not just for the creative class, but for lower income people who are being squeezed out and paying huge parts of their income for housing. Bringing HUD funding back to 1960’s levels would help a lot, but so would different forms of housing, including renting and ownership methods. Second, for the creative class, it probably makes a difference if you’re 25 or 60.

  3. Dónall Garvin Says:

    I think that the very nature of the modern home is frightening.
    I don’t believe that they are adequately designed for living in and far too over-reliant on private transport.

    What the houseprice slump will do to building trends remains to be seen but i feel that there is change on how people are wanting to live with a mood swing to Art deco/Modernist house styles.

    Unfortunately the number of people who design their own houses is small and the housing developers are designing houses that are antiquated and hark back to traditional styles e.g. every new house i have seen has a chimney pot because that’s what people see as being an integral part of a house whether it is needed or not.

  4. John Whiteside Says:

    Don’t forget the tax issues, in the US; you are rewarded for owning a house by tax breaks that renters don’t get.

    The neighborhood issue is very important; I’m thinking of the home I owned in DC, which was tiny and not a dream house – but was an acceptable space that I could afford in a neighborhood I wanted to be in, which seemed like a better trade-off to me than a better, bigger home in a place I did not want to live.

  5. Richard Says:

    Great comments all.

    Donall – I too am shocked by the lack of design in new construction. It is beyond appalling, truly frightening. So it makes sense that folks would get increasingly interested in rennovating older homes. One thing that I would love to see is more interesting new design in urban infill situations. One place I’ve seen more interesting stuff is Miami Beach and its environs both in new apartment construction and in single family renovation and restoration.

    Michael – I concur. When you purchase a house, you really need to think not about the structure but the land and location. That’s where the value is.

    John – of course the US has loaded up single family housing with incentives, not just tax incentives but subsidies to mortgages, artificially low interest rates, look-the-other-way regulations, and a massive subsidy in terms of transportation and highway building. Heck, the single family home was the fundamental tool which fuelled fordist industrial expansion by driving up consumption of durable goods. The ultimate Keynesian stimulator.

    But what role does this play in the creative economy? Brian is on to part of it, a great energy sink and environmental problem. Then add in the time costs, commuting costs, opportunity costs.

    The single family home is a romantic relic, and one I personally like, as I live in one. But from a system level, it is poorly “articulated” to the demands of the creative age.

    New forms of housing tenure will come along to replace it. They already are. It’s just a matter of time.

    Anyone care to speculate on what they think the kinds of housing options/ tenure make sense for a creative economy of ideas, innovation, intangibles, mobility, speed and continuous mobilization of human intelligence?

  6. Aimee Says:

    The one thing that separates home ownership from renting (in my mind) – your house payment isn’t going to go up every year. Once you sign on the dotted line, you’re housing cost is going to be the same for the next 15-30 years. My rent has gone up every time I’ve signed a new lease, and my pay hasn’t necessarily.

    Otherwise I agree with your arguments and prefer to rent myself. Owning a home is a huge commitment to one place and financial situation, in an otherwise very mobile world.

    I don’t quite get your argument about leasing a car though, but I’m the type of person who doesn’t mind driving an old beater. As long as it’s four wheels, an enclosed cabin, and an engine, it’s fine with me. Plus the insurance is cheaper on old cars you own outright.

  7. Jackson Diamond Says:

    You folks are just nuts. Responsible working people accumulate tools, toys, and accessories. Lots of them: Table saws, drill presses, bass boats, barbecue grills, smokers, freezers, campers, motorcycles, wrenches, hammers, etc. You can’t have the things that make life livable and live in a rental. The typical Texas lease even forbids washing one’s car or performing weekly maintenance on the rental property. Rentals are for worker drones with no skills and no life, who exist to go to the office by day and suck down the standardized pablum of predigested “culture” and sedate themselves with alcoholic soma by night.

    The skilled working people of North America have lives, skills, hobbies, and interests that extend far beyond the confines of an apartment cubicle. Their future productivity, pretraining for new jobs, development of diverse skills, indeed their very hope for self-sufficiency in retirement is contingent upon “suburban sprawl”, a rambling house full of stuff, and a big garage. Why do you want to turn them into battery chickens?