The Rise and Fall of the McMansion, and other Midwestern Housing Trends

Tuesday, September 5, 2006

In the US market, many sense that the slumping sales of Toll Brothers Builders and Lowe’s are symptomatic of an overall declining real estate and construction market.  Has all of the wind gone out of the housing market, as the housing bubble doomsday promoters predicted?

Perhaps not.  Perhaps the housing market has simply changed, and that change has yet to be noticed.

The evolution of the living unit concept has generated many different planning and building formats over the years.  One of the most radical housing concepts occurred in that era just after the Second World War; when plentiful, convenient land supplies, a growing expressway network and inexpensive energy spawned the post-war suburban tract home.  Post-war suburbs spawned this building type, requiring exposure on all sides that in turn required a rate of land consumption and ensuing density that made individual transportation – the automobile – essential.  Post-war houses were efficiently planned, but small.  Post-war houses also embraced labour saving devices that encouraged leisure.  Growing aspirations made post-war houses larger.  They became so much larger that half a century later, the same post-war tract home concept became absolutely huge.

Witness the “McMansion” housing type, nothing more than an enormous post-war suburban tract home; many times built on the extreme outer fringes of metropolitan centres, sometimes built on tear down lots in neighbourhoods that weren’t completely built out to their zoning envelopes. The post-war tract housing concept has remained more or less unchanged despite simple theme variations.  All versions of the post-war suburban tract home building type have enjoyed consumer favour during their history, despite many consumer changes over the same period.  That the suburban tract home building type is on the wane shouldn’t be confused as a sign of a slowing economy, rather that the market is ready for a different type of building for housing.

Consumer Reports Magazine recently reported that new car buyers rank gas mileage as important as reliability.  The US Census Bureau reported more ‘extreme commuters’ who spend more than 90 minutes a trip commuting, yet average commute times in many cities are slightly less, leading one to believe that more people are living closer to their employment, resulting in shorter commutes. Close-in neighbourhoods – older suburbs that were originally self contained towns – have emerged as viable live / work options.  Virtually every North American city is finding itself in some sort of urban renaissance.  Some of theattraction of pre-war neighbourhoods is their convenience to mass transit, allowing the benefits of being less automobile dependent yet still seeming quite spacious.  Mass transit is becoming more than merely an inexpensive method of travel.  Recently, the Washington DC Metro experienced some of its busiest days in history – for no special reason.

Los Angeles has realized that freeway expansion will not positively affect traffic gridlock or commute times, and has developed a commuter rail system rivaling Chicago’s.  Mass transit has become an identifiable trend, with cities as diverse as Pittsburgh and Salt Lake City developing new light rail or commuter railway systems.

While this argument describes a market segment that be open for change, there is an even larger market force ahead: housing needs to be fueled by population growth.  Growing population numbers are made up of people without benefit of large, home equity financial resources, and reflect growing numbers of immigrants at levels unseen in decades.  Initially, postwar housing addressed affordability; the recent McMansion craze has not.  The ‘middle market’ is under-served.

A prediction of the Midwest US housing market for the near future?  Smaller, more efficiently planned housing types built closer in, perhaps on redeveloped land, perhaps replacing older housing stock that requires substantial repair. ‘Age in Place’ living and renovation may become commonplace.  This housing stock will be located in neighbourhoods that support denser, yet livable communities.  Neighbourhoods that are prime for new housing development demand respect of existing context and zoning codes.  In many locations, the building codes that support this type of housing may not promote light wood frame construction.  Housing units convenient to mass transit will be most desirable.  Whether people are following their employment centres or employment centres following people, people appear to be living closer to their work.  The neighbourhoods that made up the original ‘pre-war’ American suburb may demonstrate how this housing type works.

Original American suburb towns have weathered market downturns, are highly desirable and tended to be built around mass transit facilities.  These neighbourhoods were unattractive to McMansion development, because they were never planned to support large amounts of very low density development with underground infrastructure or municipal taxation levels.

To describe this theory another way, think of building for the ‘middle market’ by offering quality housing set in attractive surroundings, convenient to employment with viable mass transit options.

As gasoline becomes expensive and commute times increase, building large tracts in the exurbs will seem less viable, at least for those tied to employment.  As for building more McMansions on existing plots? Perhaps it will remain as some sort of niche market for a while.  McMansions need a steady supply of relatively large land parcels in low density neighbourhoods, the closer-in 1950’s tracts may be attractive.  Yet, picture this: a very trendy real estate and consumer niche is developing around exuberant ‘mid century modern’ themes – Eichler tract homes in the San Francisco Bay area, even Pierre Koenig’s Case Study House #22 that cantilevers out over the Los Angeles basin.  Themes more reminiscent of the Jetson’s rather than pseudo-tudor castles may be poised to re-overtake suburbia.

Finally.