Wednesday, July 21, 2010

Housing and the American Dream: Think Small

Whether the economy is (a) improving, (b) getting ready to tank again, or (c) precariously maintaining its equilibrium (take your choice, depending on which pundit you believe), we all need somewhere to live. There's a tremendous problem with homelessness here in Los Angeles and in other metropolitan areas, a topic undoubtedly worthy of discussion. But for this post, let's stick with the population that's fortunate enough to be able to own or rent comfortable housing.

For years, a significant part of the American Dream was to own a home, complete with yard and white picket fence. During the real estate boom, it seemed that everywhere you turned you were faced with people strongly advising you to buy a home, then urging you to leverage it into a larger home -- or you were at least supposed to refinance regularly to support buying all the stuff you needed to fill the place. You were met with looks of disbelief or even utter disdain if you weren't in the process of buying/remodeling/selling/trading up.

All that's changed. In fact, once again we're hearing that, in many cases, it might be smarter to rent. One example may apply to people who live in New York City. A recent New York Times article demonstrated that for a hypothetical family of four earning $175,000 a year, it would cost 18% more to own a house in the suburbs than to rent in the city. Of course, there are trade-offs that might make it worthwhile for some families to live in the suburbs, but that should not be an automatic assumption any more than one can automatically assume that buying a house is always a good investment.

If saving money is your primary concern, it's important to figure out if renting makes more sense no matter where you live. Here's a rent-or-buy calculator from the New York Times to help with that task. And here's a Devil's Advocate article entitled "Rent Forever, Don't Buy" that presents some of the benefits of avoiding home ownership. It's worth considering what's right for you in your situation without feeling pressured one way or the other.

What if you'd be quite happy to rent, but you can't afford a place in the neighborhood you prefer? In Los Angeles, one solution is to think small. An LA Times article talks about the Manhattan-sized mini-apartments built in Santa Monica that make beach living relatively affordable (in LA that means a 350 square foot apartment for $1100 to $1400 per month). Would you trade living space for beach access? Many people would.

But what if you want to own your home and are you're also willing to think small? I mean ultra-small. You might find that owning a home could cost less than the price of a fancy new car. I've talked about small houses in previous posts (see below) but there seems to be increasing media coverage of this option. "Downsizing to 100 Square Feet of Bliss," is an article from CNN.com about the joys of a small house in a bad economy. "Do It Yourself Downsize: How to Build a Tiny House" was a featured story on NPR just a few weeks ago. A do-it-yourself small house can cost less than $10,000 (of course, you'd also need land to build on, unless you're going to treat it like a trailer and be on the move all the time); plans are available for those of us who are less inclined to tackle the project on our own. Check out Tiny House Blog , This Tiny House, and Tiny House Design for excellent information and regular posts about very small houses.

Not everyone could live comfortably in a home as small as an average bedroom, but I think we're all probably more adaptable than we realize and I know that most of us could live with less space and fewer possessions than we have now. (Full disclosure: two of us downsized to a 1500 square foot townhouse purchased twelve years ago, before the boom and bust. It's quite comfortable. Because we both work at home, smaller might be a challenge, but certainly not an impossible one.) It's always easier to downsize by choice, but even if financial circumstances have you considering the possibility of moving to a smaller apartment or home, you may find that less space has certain advantages you never expected. Enforced uncluttering could be one benefit, if you don't rent lots of storage space to avoid the uncluttering process! (Read my book to learn about my adventures with too much stuff.) Rethinking how much you need could be pretty enlightening, too.

So, was Mies van der Rohe right when he said, "Less is more?" I think he was. I'd like to hear your thoughts in the comments.

© 2010 Cynthia Friedlob
Image credit: Gerard79 at Stock.Xchng

Related posts:
Small House, Big Benefits
Small Houses, No Houses
Living Small, Paying Rent
Manhattan's Smallest Home

6 comments:

Jo said...

I’ve read about these really small homes before and while I find the concept intriguing it just seems so extreme. Do we really need to live in a teeny-tiny house to do right by the economy and the environment? There must be some reasonable middle ground between 160 square feet and 2,000 square feet that would allow people to lower their financial and environmental impact without requiring them to store their clothes in their car. Maybe people just don’t blog about it?

Cynthia Friedlob said...

I agree that there must be a middle ground, Jo. That's usually the position The Thoughtful Consumer blog advocates: think about the issue and find something that works for you without feeling obligated to go to the extreme solution. But it's always interesting to me to learn about those extreme solutions and to speculate about what it would take to embrace them.

I also think you're right about what bloggers choose to discuss. The extremes are more thought-provoking than the middle ground, so they're usually more enticing topics to readers. I've blogged about all kinds of housing choices, from alternative to communal to lavish. (Here's the link to posts with the "housing" tag: http://thethoughtfulconsumer.blogspot.com/search/label/housing )But, while my posts cover some extreme choices, my personal choices are far less dramatic!

Cynthia Friedlob said...
This comment has been removed by the author.
Cynthia Friedlob said...

Okay, let's try this one more time:

http://thethoughtfulconsumer.
blogspot.com/search/label/housing

That's the link! You can also find it by scrolling down the sidebar on the right side of the blog until you get to "Labels" and then clicking on "housing."

And thanks for your comment, Jo!

Hillary @ This Tiny House said...

Let's not forget that much of the current day tiny house movement exists because of housing code regulations. Since a structure under 100 or 120 or 200 square feet doesn't seem "livable" it has skirted many regulations that a standard small house is subject to. Most housing code is currently structured to support the "bigger is better" model. WHEN and IF that changes I think we'll see more "reasonable" 400, 500, 600 square feet homes.

Cynthia Friedlob said...

Interesting! I hadn't considered that as a factor. A cursory search on Google indicated that 100 square feet was usually referred to as a "shed." I wonder what permits kick in if electrical wiring is installed and running water. When does a shed become a house?

And now I'm wondering how tiny houses are insured, too. Are they so small that owners don't bother? If they're really miniscule and on wheels, are they treated like trailers?

Interesting considerations. Thanks for your comment, Hillary!