Both bigger houses for smaller families and fully occupied monster houses seem to accord with current trends in American geography.
Here is the Case-Shiller home price index, which measures the cost of homes in comparison with family income.
Note that between 1920 and 1940, home prices in relation to income collapsed. Shiller explained this as a result of calamity.
1921–1942: This was the only period where prices were considerably below their 1890 level throughout. The start of the decline roughly corresponds with the start of World War I, which was followed by the Great Influenza Pandemic of 1918, the Great Depression and finally World War II all of which, Shiller argues, could have affected home prices negatively.
The 1920s was also a period when house-building techniques began to modernize. IIRC, this led to a lowering of the costs of housing.
(It has been said that the 1920s were the "real" beginning of the 20th century in the US in terms of modernization. Europe lost its faith in progress and civilization in the aftermath of WW1, a disillusionment that also struck the US. But the US went into emotional denial during the 1920s and rebooted its optimism in technological progress, which can be seen in 1920s Art Deco design, for example. The denial of the 1920s expressed itself in an odd mix of hedonism, financial speculation, a desire for "normalcy" and political conservatism. The same kind of cultural phenomena happened in the 1980s in the US after the disillusionments of the 1970s.)
These modern building techniques advanced in sophistication during WW2, and allowed for rapid mass production of houses in suburbs during the 1950s after two decades of suppressed demand.
Detroit might be a useful example of the evolution of American geography. The middle classes began to move out into the suburbs in the 1950s. Here is a graph of Detroit's population.
Simultaneously, manufacturing began to make up a smaller part of the economy.
Nationally, this trend goes back to the end of WW2.
Even when manufacturing output expanded, jobs in manufacturing contracted.
Here are several trends since the 1840s:
- Farming employment has been in long decline.
- Factory employment peaked in 1950, then declined.
- Service employment has been on a constant rise.
Manufacturing does not happen in the suburbs. The factory jobs are either in the cities (automobile production in Detroit), which began to decline after WW2, or the rural areas (textile production in the South) which are now in decline.
From the end of WW2, the cities languished and the suburbs prospered. In the public mind, the cities were associated with poor minorities.
There is a sense that in the 21st century, this has reversed.
Who gravitates to the cities today?
- Professionals.
- Artistic types.
- Educated youth.
- Older corporate executives who used to live in suburbs. (Corporate middle management is being moved out of major global cities into mid-sized cities like Phoenix and Denver.)
The top ranks of management are Republicans; everyone else in these groups tend to be Democrats. (The current tax reform shifts the burden of taxes from corporations to professionals, who tend to be Democrats.) Each of these groups tend to be affluent, to various degrees. This drives up the cost of urban real estate. Also, rich white liberals love the city, but they protest the construction of any new office or residential buildings; the lack of new supply drives up prices.
Some of the poor who used to live in the city are getting priced out. They are moving to houses in the less expensive suburbs, far from the social services that used to help them. Rich white liberals in the city are willing to pay higher taxes for urban amenities like opera houses, hospitals and public schools for their kids, but they don't want to pay for services in suburbs for the poor.
And so here we are.
What is to be done?
It's a matter of supply and demand.
One issue is housing supply. Where there is now already development, there should be mega-development. In the cities, that means building skyscrapers, and in the suburbs that means building bigger houses (which is what is happening anyway).
There should be no restriction on building size or on building heights. The restriction would be on resource consumption. Buildings would be required to severely limit the amount of electricity and water that they utilize and consume, and they would process much of their wastewater. They would be "semi-autonomous buildings".
This restriction on consumption would have a limiting effect on the size of buildings. So "monster houses" in the suburbs would be allowed, but they would have water catchment systems and yards that would require less water. They would also have solar panels and some battery storage with the requirement that they reduce their evening electricity load by 50% the household average. Also, houses and buildings would be built to be far more durable.
All of this would cost a little more, but it would have the effect of limiting the size of houses and buildings. (Currently, the size and costs of houses in the US keeps expanding anyway, and without any apparent necessity.)
Ideally, the greatest restriction should be that building on new land should be discouraged. Also, building in the kind of (risky, self-indulgent) places that people especially love to live in, like forests and ocean fronts, should especially be discouraged.
The other issue is demand.
In the US, there is a demand for ever-larger houses. There are various theories to explain this, such as:
- The house is a symbol of "success" in the US, especially for the older generation. (American culture is unique in that financial success is equated with virtue. This is related to an early, formative Protestant ethic, as well as a unique culture of enterprise.)
- The house serves as a surrogate community or family in the US, especially for older "empty nesters" who should be downsizing.
- Home sizes increase after a recession (although home sizes are generally always increasing in the US and recessions are merely interruptions).
- Increasing home sizes in the face of decreasing family size are proof that the US is a totally awesome country where dreams come true.
(The last website might be taken as evidence of how Americans deal with tragedy and disillusionment -- for example, with the 2008 financial sector and housing meltdown -- by doubling down on denial and resuscitating their faith in "progress", amplifying their risk-taking economic behavior, partying harder than ever, and intensifying their escape into domesticity and political conservatism.)
The last website is libertarian, and there is an extended discussion in the comment section on:
1) Is the ever-expanding American house due to tax subsidies?, and
2) Is a house really a good investment? (and, relatedly, What does one mean by an "investment"?).
It could be that the demand for ever-increasing home sizes in the US is largely a product of policy. The issue would be demand-side economics -- tax breaks for the rich and subsidies for the poor.
Liberals wring their hands over suburban sprawl and ever-increasing home sizes in the US. But is it to some degree liberal policies that have encouraged ever-larger homes in the name of the "American dream"?
There is another issue that the article mentions, which is decreasing family sizes in the US, which also affects demand for housing.
Fertility rates in the US are in fact remarkably stable at 2.0 children per family, slightly below the "replacement level" of 2.1 children. This is a very high fertility rate compared to other advanced economies.
Japan has a very low fertility rate, in contrast.
The historical trend is for developed countries to have lower fertility rates; but when those advanced economies enter prolonged periods of stagnation, fertility rates fall further. This leads, as in the case of Japan, to a vicious circle, where lower population levels decrease demand for goods and services, and the resulting deflationary economy inhibits higher birth rates.
Another related issue is immigration rates. Economically, higher immigration rates increase demand for housing.
The US has a very high immigration rate, with 14% of Americans being foreign born. In contrast, foreigners make up only 1.5% of Japan's population, and they generally don't become Japanese citizens. (Even ethnic Koreans and Chinese born in Japan typically forgo naturalization).
There could be a trend in immigration policy in the US that favors:
1) more educated immigrants; and
2) fewer immigrants.
The most recent major immigration reform in the US was the Immigration and Naturalization Act of 1965. It opened up immigration to non-Europeans, with an emphasis on reuniting families and targeting immigrants with special skills (e.g., engineers).
The 1965 Act marked a change from past U.S. policy which had discriminated against non-northern Europeans. In removing racial and national barriers the Act would significantly, and unintentionally, alter the demographic mix in the U.S.
The new law maintained the per-country limits, but also created preference visa categories that focused on immigrants' skills and family relationships with citizens or U.S. residents. The bill set numerical restrictions on visas at 170,000 per year, with a per-country-of-origin quota. However, immediate relatives of U.S. citizens and "special immigrants" had no restrictions.
This was at once a step toward greater ethnic and racial inclusiveness and toward greater selectivity in terms of job skills. In terms of identifying a trend, this would be a hint or intimation of where things are heading. This would be toward
1) colorblind policies that do not discriminate in terms of ethnicity, but that
2) do carefully discriminate in terms of education level.
In fact, the 1965 Act, which is at once both generous and shrewd, seems out of step with the attitudes of many Americans in the 21st century in terms of its generosity. While there seems to be no desire to return to an exclusively European-origin immigration policy, the idea of "no immigration" is beginning to seem a possibility. In particular, there is increasing sentiment that "reuniting families" is a corrupt loophole ("anchor babies").
This populist xenophobia reflects economic reality. Typically, immigrant groups seek to expand immigration quotas for their own group in order to increase their political and economic power. But in the 2016 presidential election, almost half of all Hispanic voters in Florida voted for Donald Trump. A conservative political orientation might reflect the affluence of Hispanics in Florida (Cubans), as well as the cultural conservatism of Hispanics more generally. But certainly some of those Hispanic voters were working class and/or (fiscally) liberal. Not only do they compete economically with illegal aliens, but also with legal immigrants. In the United States of the 21st century, working class jobs have become increasingly scarce, with the resulting spectacle of naturalized immigrants voting against other immigrants from their own country of origin.
Nevertheless, the same populist movement that seeks to limit immigration also wants to re-industrialize the United States. In that case, highly educated immigrants will be needed. This might run counter to populist xenophobia, but the US has always turned toward foreigners to fill its ranks of engineers and scientists.
So, in the future there may be greater restrictions on immigration -- even while the most educated and talented of foreigners may be wooed by the US. With fewer immigrants, especially working-class immigrants, there would be less demand for housing, although there might be more McMansions for wealthy immigrants.
Again, reduced immigration would reduce demand for homes. But there is one more potential trend that would reduce demand for larger homes.
It turns out that many young, cool, hip, educated, creative millennials who supposedly want to live permanently in the city actually want to live in the suburbs. They seem to differ from their predecessors in that they may want to DOWNSIZE. They want smaller houses and apartments in the inner suburbs that are closer to the city.
So what’s going on? Aren’t millennials all about urban life?
“Between 1978 and 1990, there was a 32 percent increase in births, so now there are 32 percent more young adults in the city,” Dowell Myers, professor of demography and urban planning at the University of Southern California told Time, who has argued that the phenomenon of city-loving millennials is mostly a myth. “That upswing has led people to think that there’s a real change in taste, when there’s just a lot more young people born 25 years ago.”
Most millennials turned 25 in 2015, Myers said, meaning the demographics of millennials are changing. This, however, doesn’t mean that growth in city centers is declining. But in most metros places, including Houston, millennial population growth is happening more quickly in the suburbs than in urban centers.
The Kinder Houston Area Survey found that 50 percent of Houstonians would prefer to live in “a smaller home in a more urbanized area, within walking distance of shops and workplaces rather than in a single-family home with a big yard where you would need to drive almost everywhere you want to go.”
What might be the influence of personal technology in this trend?
The older generation of Americans treasure the house as a symbol of their aspirations that also serves as a repository of artifacts that embody precious memories.
But what happens when one's accomplishments and memories are preserved instead on social media? That is, the core traditional attitudes and values have not changed so much down the generations. What changes are the expression of those values.
How radically can attitudes toward housing change?
Perhaps Japan can serve as an example.
In Japan, the lifespan of the average house is supposedly less than 30 years.
Unlike in other countries, Japanese homes gradually depreciate over time, becoming completely valueless within 20 or 30 years. When someone moves out of a home or dies, the house, unlike the land it sits on, has no resale value and is typically demolished. This scrap-and-build approach is a quirk of the Japanese housing market that can be explained variously by low-quality construction to quickly meet demand after the second world war, repeated building code revisions to improve earthquake resilience and a cycle of poor maintenance due to the lack of any incentive to make homes marketable for resale.
Everywhere from major metropolitan areas such as Tokyo and Osaka to struggling mid-size cities to suburban housing estates, renovated buildings are an evolving niche in the property market, emblematic of the dramatic transformation under way in Japan. The country is shrinking, with a negative growth rate that’s expected to bring its current population of about 127 million down to 88 million by 2065. It’s also an ageing society, and within 20 years over a third of its inhabitants will be 65 or older. As the population shrinks and ages, it is also concentrating into metropolitan areas, leaving millions of suburban and rural homes vacant. The current vacancy rate nationwide is about 13%, according to the Nomura Research Institute, and that figure is expected to rise above 30% by 2033. Coupled with Japan’s stagnant economy, these statistics have many convinced that the market for new buildings will begin to dry.
In some cases, refurbishment is radical.
Younger people, particularly in urban areas, have more flexible options. To accommodate them, new companies are looking beyond conventional housing. In recent years, a number of small development companies have been buying up older buildings and giving them new uses. The Tokyo-based company ReBITA has been converting apartment buildings, offices and company dormitories into shared live-work spaces – affordable rental units with common kitchens and work areas. Such spaces were uncommon in Japan just five years ago, says Azby Brown, director of the Kanazawa Institute of Technology’s Future Design Institute in Tokyo. “It’s a new lifestyle and I don’t think a lot of the big housing companies have picked up on it yet.” He says it’s as much about reducing the cost of housing as embracing a more community-oriented form of living. Some even see these types of social space as a roundabout way to reverse the country’s low birth rate.
Through its association with the Urban Renaissance Agency, Muji has begun renovating and redecorating unitsin public housing blocks to attract younger tenants – tearing out walls, replacing clunky kitchen cabinets with open storage spaces and racks, clearing space for bicycle storage.
“The old design doesn’t fit with younger people’s tastes,” says Koji Kawachi, director of Muji’s dwelling space operation, noting that many of the buildings have a cramped, overly partitioned layout. “The renovation is based on the idea that small, separated rooms can be integrated into larger spaces,” he says. The company strips the rooms of excessive finishes and replaces them with clean white surfaces and spare wood furnishings.
This is the economic explanation for why the Japanese have historically resisted the purchase and refurbishment of older homes, and why financially strapped younger Japanese are more willing live in refurbished homes.
There are other theories as to why the average lifespan of a house in Japan is 38 years (as opposed to 100 years in the US).
- A culturally ingrained love of newness as spiritually clean and pure.
- Post-war housing that was shoddy.
- Constant earthquakes make the Japanese feel that houses are disposable and that older homes are potentially dangerous (an irrational belief that reflects a pervasive cautiousness).
- Regulations that ensue after major earthquakes classify older homes as inadequate.
These reasons may be true and valid, but they ignore a couple of other influences.
The private, domestic realm in Japan is a refuge of individuality, and consequently Japanese often have rigorous hobbies (flower arranging, calligraphy, music) through which they can express their creativity and uniqueness. The house is likewise seen as a private, transient mode of self-expression, the way Snapchat is for American teenagers.
Another reason might be that Japanese and other East Asian peoples do not like to purchase used items because they feel that something of their previous owner's essence adheres to the item.
This reflects a traditional "panpsychist" worldview in which all objects possess some qualities of consciousness.
In philosophy, panpsychism is the view that consciousness, mind or soul (psyche) is a universal and primordial feature of all things. Panpsychists see themselves as minds in a world of mind.
Panpsychism is one of the oldest philosophical theories, and has been ascribed to philosophers like Thales, Parmenides, Plato, Averroes, Spinoza, Leibniz and William James. Panpsychism can also be seen in ancient philosophies such as Stoicism, Taoism, Vedanta and Mahayana Buddhism. During the 19th century, panpsychism was the default theory in philosophy of mind, but it saw a decline during the middle years of the 20th century with the rise of logical positivism.[1][2] The recent interest in the hard problem of consciousness has revived interest in panpsychism.
According to Graham Parkes: "Most of traditional Chinese, Japanese and Korean philosophy would qualify as panpsychist in nature. For the philosophical schools best known in the west — Neo-confucianism and Japanese Buddhism — the world is a dynamic force field of energies known as qi or bussho (Buddha nature) and classifiable in western terms as psychophysical."
Even more than other East Asians, in their popular culture, the Japanese are prone to see otherwise inanimate objects -- rivers, rocks, dolls, robots -- as possessing a soul or spirit.
If one looks at the refurbishing of homes in Japan, one striking pattern is that the refurbished home is radically altered. The old home is gutted to the shell, and an entirely different and often unfamiliar design is implanted. So this is not a "refurbishment" in the American sense, in which a newly purchased house will come with new carpets and kitchen cabinets and a fresh coat of paint. This is practically a new structure.
This resonates with the "ship of Theseus" paradox from philosophy.
Does an object that has all its components replaced remain fundamentally the same object?
In Japan, a home that has been stripped down to its shell and rebuilt with a new design is considered a new home -- at least in the minds of the more economically desperate younger generation. The older generation, in contrast, might still feel uncomfortable with a rebuilt structure.
What are a few commonalities in housing trends in the US and Japan?
1) The values and attitudes of the younger generation might at first seem to diverge from those of the older generation, but it is mostly a matter of expression, not of substance. But the new expression of old values might develop in unforeseen and significant ways.
2) There is economic pressure on the younger generation to downsize and live in more urban areas.
3) There is technological innovation that allows for change.
4) There is the slightest shift to a semi-collectivist lifestyle (e.g., dormitory life) for young adults.
There is the possibility that many of today's McMansions for small, wealthy families in the affluent suburbs will be tomorrow's shared houses for aspiring young professionals who would utilize self-driving taxi services and largely work from home. Economically and environmentally, this would be great news.
