Sunday, July 26, 2009

Small Houses, No Houses


In this economy, it should come as no surprise to anyone that, as a society, we are reconsidering what home ownership means. For the many people who are unable to make their mortgage payments or are dealing with foreclosure, owning a home may not be an option again for a very long time, if ever.

With property values depressed, even fortunate or frugal homeowners who aren't at risk are also reassessing the amount of space they need to live in to be comfortable. Is that big monthly payment for a 5000-square-foot home starting to look a bit pricey for a family of two? Is paying for the upkeep on a half-acre of land plus swimming pool feeling like it may not be worth it after all? If you've got two kids, is it really necessary to have six bedrooms, a den, a "great room" and a full finished basement? "Trading down" at the next opportunity to do so is starting to sound like a good idea to a lot of homeowners.

Of course, how much space you and your family need to live is a personal decision, but the previously popular belief that bigger equals better when it comes to houses has fallen out of favor. There are obvious advantages to this change of opinion, at least the way thoughtful consumers see it. Better use of natural resources and lower expenses that allow for better allocation of personal resources are two that come to mind immediately.

So, what's in the news about this enforced reassessment of how we're "supposed" to live?

Bankrate.com has an article entitled, New Realty Reality: Small Is the New Big, written by Jay MacDonald. The article says that we're getting a healthier perspective than we've had in a long time about what a home is:

"As Americans focused more and more on the financial appreciation of their address, many lost the thread of what makes a house a home in the first place.
. . . [Real estate expert Barbara] Corcoran says, 'When someone decided to renovate a kitchen, the first priority was, what changes would sell well, and the second priority was, what changes would we enjoy? People sacrificed many things they would personally enjoy for the sake of resale. I saw that over and over.'

". . . You don't have to own everything that you make use of. You don't need one room for exercise equipment, one room for a movie theater," says Marc Vassallo [co-author with architect Sarah Susanka of Not So Big Remodeling: Tailoring Your Home for the Way You Really Live.]
". . . The 'Not So Big' movement advocates downsizing toward cozier, more enjoyable homes that emphasize quality over quantity."
Last week the Fort Worth Star-Telegram ran an article entitled, "For Some, Tiny Houses Are Just the Right Size," by Steve Campbell. It discusses "super-downsizing:"

". . . but that’s just the extreme edge of a growing movement away from suburban castles and into 'right-sized' homes that require less energy, upkeep and money. . .

". . . In a June survey by the National Association of Home Builders, 59 percent of respondents said they are building smaller homes . . ."

All this is good news for the small house builders. (Please see my 2007 post, Small House, Big Benefits? for examples of very small homes. Also, several months ago, Michael Janzan at Tiny House Design posted about his Tiny Simple House and the shotgun houses that inspired it.)

But you don't have to go "super-small" to rightsize into something that works. Habitat 15 is a Hollywood, CA, development that boasts fifteen townhouses on a 14,000 square foot lot:

"Design elements such as the irregular window placement are not merely some artistic statement. Their positioning on all the exterior walls, as well as on the roof in the form of skylights, is driven less by the aesthetic demands for symmetry and more by the need to draw light inside the homes, some of which are two stories tall, some of which are three. Lucky for the architects, the final result is functional and idiosyncratically arresting."

Not cheap, however, with prices from $590,000 to $849,000. Photo tour here.

In Eagle Rock, CA, just a brief freeway ride from Hollywood, fifteen "environmentally friendly, almost-townhouses" share a half-acre of land.

"'The buildings don’t share a common wall,' says architect Kevin Wronsky, who with brother Hardy also is the developer of the project, called Rock Row. 'There is five inches of space between each of them that is totally open.' The gaps allow each building to move independently of the others in an earthquake. Perhaps most important, the space serves as sound insulation, lessening how much noise transfers from one unit to the next.'"

Take a photo tour here. The units range from about 1300 to 1600 square feet and they're also expensive. However, if you can afford them, they have a special feature:

"With prices running $482,000 to $569,000, Rock Row has the first homes in Los Angeles under $500,000 to be LEED certified, winning a U.S. Green Building Council rating for green design and sustainable construction methods."

Obviously, one doesn't need to spend at the steep prices we still have in Los Angeles to find a suitable smaller home. Unless you're here in LA or New York or San Francisco, you'll undoubtedly be able to find or build a house at a smaller scale and more reasonable price that will serve you well.

If you want to buy a house. If you can afford to buy a house. There is nothing wrong with renting and it may offer benefits many of us haven't considered. According to a 2007 article in eFinanceDirectory that lists some of those benefits, thanks to the collapse of the housing bubble, people who bought houses in 1987 would have been better off investing their money in stocks from 1987 to 2007. Of course, between 2007 and today, the financial markets have taken such a beating that the average person might have done better stashing cash in a mattress.

The serious problem we face right now is that the economy has been so devastated that many people can't even afford to rent.

In April, Patrick Oppman of CNN.com wrote about a tent city in Seattle:

"Set up in the parking lot of a church near Seattle, Washington, the camp houses anywhere from 50 to 100 homeless people each day.

"Residents call it Nickelsville. The name takes a page from the infamous 'Hooverville' shantytowns of the Great Depression that were named for a president many thought did not care about their economic hardships. . . .

". . . 'In shelters, if you don't get there in time enough, you don't have your bed no more 'cause there are so many people trying to rush in to get it,' [a resident] says. 'Got a lotta people losing their homes. You don't want to go all the way to the bottom. Nickelsville is kind of a catch in between.'"

California's collapsed economy has resulted tent cities, too. Over a year ago, the BBC reported on a tent city in Ontario, forty miles east of LA.

You can listen here to an NPR report about the situation in our capital: "Sacramento's Tent Cities Still Bloom In Secret," by Ben Adler on today's "Weekend Edition."

See photos from an earlier NY Times story about the Fresno and Sacramento area tent cities here.

And, as I've always said, when a story makes it onto "Oprah," it's hit the mainstream. See Lisa Ling's report here about her trip to Sacramento.

We've come a long way from the days of the mandatory McMansion, from the peculiar concept of "starter houses," from rampant speculating because housing prices were "always" going to go up. Is that a bad thing? Not necessarily, if it forces us to be more realistic about our expectations rather than having feelings of entitlement that usually lead to very bad judgment. Is it a bad thing for the people who are affected personally by the mess we're in? Of course. And that's why remembering the importance of charitable giving at this critical time is important for those of us who are fortunate to have a roof over our heads – whether we rent it or own it. (I'll be talking more about charities in my next post.)

Meanwhile, I've been reminded of the cleverness of people who design for all kinds of challenging housing situations. Take a look at this unusual $5,000 "paper" house by a Swiss company called The Wall AG. These unique houses are stronger and more resilient than they may appear, just like the people who will live in them.

I feel certain that the strength and resiliency of our society will pull us through our current housing crisis. But I haven't dismissed the idea of hiding some cash in the mattress.

© 2009 Cynthia Friedlob

Photo credit: Salvatore Vuono

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4 comments:

Alex Fayle | Someday Syndrome said...

With overly large houses, it's much easier to get cluttered and disorganized. If you have rooms that don't get used much, they become catchalls for whatever you don't want to think about and suddenly your mortgage and other monthly bills aren't payig for useful space - they're paying for storing stuff you probably don't even want.

Not a good use of $$$ for sure!

Cynthia Friedlob said...

Hi, Alex! Nice to hear from you.

Quite true that it's easier to allow clutter to build up if you have more room than you really need. It let's you avoid making decisions about what to do with the stuff.

And, yes, the cost per square foot of a home equals pretty pricey storage space.

Thanks for your comment.

philippine real estate said...

Great places. Thanks for the photo tour.

Paula M

Cynthia Friedlob said...

Glad you enjoyed! Thanks for stopping by the blog.