Future of Housing

Future of Housing

The blog today is about the future of housing in America. I have just finished a keynote speech to the annual Washington Housing Conference, in Spokane, Washington.

The PowerPoint slide program is here:

It is time to reinvent housing in America. This is necessary not simply because a portion of the population can not afford housing. That is, the need to reinvent housing goes beyond the related issue of affordable housing.

Rather, as a society we have gotten ourselves into a terrible fix, and now face an era when one way of life must come to and end, and a new way of life must begin. We can do this deliberately, as though we are grasping an opportunity, or we can do this unwillingly, and if we go that route it will be more difficult.

To understand the fix we are in it helps to contrast the choice between two kinds of societies. In Society A everyone lives in 4000 square foot houses, and has no time for exercise, has time for friends once a month, and has one week of vacation. In Society B, everyone lives in 3000 square foot houses, has 45 minutes a day for exercise, time for friends once a week, and has four weeks of vacation. Using this illustration from Robert Frank’s compelling book, Falling Behind, I polled the 600 people attending. Virtually everyone says they would choose society B, yet understands that we are, in fact choosing to live in Society A. Why? What has happened?

We have been caught up in a historical cycle in which it is a fixed belief that bigger will inevitably lead to better and happier – whether we are talking French fry servings, cars, barbecues, stores, video screens or houses – and we have pursued more and bigger despite the evidence that the pursuit may be self defeating. It was in this societal context, where big has been equated with better that we created the housing crisis of our time. The affordable 950 square foot house of the 1950’s became the 5000 square foot house of the 21st Century which is affordable to most only with massive, life-long debt. Naturally, this has felt like progress. But we have created a world that we cannot afford.

What does the future hold? First the end of the suburban building boom that has been vital to the U.S. economy for several decades. It looks like this will come to an end for three related reasons – peak oil and the climate crisis, the mortgage mess that is connected to income inequality, and the aging population.

Peak oil and climate change will, it appears, require a rethinking of a mass-commuting and energy wasting form of community development, even to the point of stopping most suburban and exurban development altogether(look for “Crunch Time, Sep3, 2007). It will be market forces, not policy alone, that will drive this development.

The mortgage crisis that began in 2007 will last until 2012, according to one forecast, as affordable loans adjust into an unaffordable range. This is taking place within a context of rising income inequality between the top 5% of the society and the bottom. From 1949 to 1979 each wealth bracket saw their income go up at about the same rate. From 1979 forward, market forces and government policy radically tipped wealth generation to the upper end, so that those from the bottom to the middle saw little improvement while those at the top saw a tremendous rise. Half the U.S. population makes less than $30,000 a year, two-thirds makes less than $50,000 a year, while those making a million or more, or one-half of one percent of the population, saw more than half of all new wealth flow to themselves. The nature of the information economy contributed to this split, as new ideas could be capitalized, moved quickly to market dominance, and a new set of millionaires created. But there was no trickle down for wage earners.

Finally, an aging population is confronted with limited housing choices. Fewer than we might guess will want to live in 5000 square foot McMansions, while members of the Millennial generation will not want to and in any case cannot afford to (except for top earners). In fact, one of the future zoning fights will be about how to allow the big houses to be remodeled into multi-family housing, just as the old Victorian mansions once were.

So, we are in a fix. The housing culture we have created will not be sustained, though many believe that we will try mightily to do so. There are however good options, if we could but choose them in a timely way.

First, housing designs and community development can be remade to account for the climate crisis and peak oil. We have lots of examples of how to do this. Second, the small house movement, as well as models like co-housing, can be part of the answer both to the financial challenges of inequality as well as to the housing needs of a senior population and the house preferences of the millennial generation. The building and housing finance industries will be required to make the biggest adjustments to enable these movements to become mainstream. And national policy will be needed to attend to the rising impacts of inequality gone out of control. Re-thinking community design to encourage compactness, human scale, and energy efficiency is not complicated; we must only choose that direction.

“Imagine a place which leaves you enough time to do other things. Imagine a place which will leave you enough money to enjoy your life. Imagine a place where your soul is at peace. This place already exists.”

It is time to reinvent housing…for all of us.

Glen Hiemstra

About Glen Hiemstra

Glen Hiemstra is the founder and owner of Futurist.com. An internationally respected expert on future trends, long-range planning and creating the preferred future, Glen has advised professional, business, and governmental organizations for two decades.

7 Comments

  1. Glen Hiemstra   |   Sep 3, 2009

    Dan, thanks for the comment this week. It is useful to remember how far we have come in a mere 100 years.

  2. Dan   |   Aug 31, 2009

    Housing will have to get smaller as population increases. but I don’t think it will happen anytime soon. Most people aren’t willing to give up indulgence of “big things”. the pretenders will fight tooth and nail to live beyond their means. successful people will continue to compete for sucess to maintain this lifestyle. the result of this is that more and more people will be left out and the gap between and rich and poor may continue to widen. On the other hand, it’s also exciting to think about the exponential growth of technological developments in develop countries around the world. developments in nanotechnologies may soon make health care afordable for everyone and change the way we live, work, communicate, etc… housing on floating islands may help alleviate over crowding. Bioengineered rice can be grown anywhere and help prevent world hunger. Solar paint which can harness sun produce power cheaply and paint on buildings. Coastal desalination plants can help deal with fresh water shortages. Of course, most of these are not yet available but knowing the fact that the researches are ongoing, as we speak, around the world makes it exciting. We’ve come so far already after a hundred years after the Wright brothers started dreaming about building a flying machine.

  3. David Otiende   |   Apr 25, 2009

    Dear people

    The future is bright as all can agree. The financial situation is undergoing a revolution. What may happen in the near future is the need of the word to look forward to a type of a savior to rescue them from the present situatrion. For there to be clear new finacial word there will be need for the word to adopt to one currency but this currency will not need to be tangible thanks for the degital technology. The person who will come up with this theory and which will be put to practice will actually be the saviour of the world financial system .The example of this is the Marshial plan performed by the American government to rescue Europe out of the depression after the world wars. This time around it is the chance of Europe to pay back in kind. Euro will be the currency of the time but will only be in cerculation in digital form Thanks to the tchnology. this new system will rid the world of:
    1. Dictators
    2. Terrorist
    3. Cheats
    5. Gamplers
    6. Arms race
    For any transaction will be monitored by banks’ remote control and approve only right transactions.
    This future super financil system will however be abused due to man’s sin and eventually will fall in tae hands of afew people who will declare themselves god. This will happen because humanity will start worshiping this supereconomic system and God will not allow this for He is the only one who has the sole previlege of Saving mankind and who should be worshiped through the one man he has sent that all should call upon for salvation; the man JESUS CHRIST

  4. Rosa   |   Sep 21, 2008

    Dear Glen,

    I wouldn’t say that I have wisdom to share, but a story that may appeal to your passion.

    My grandmother died in the Spring–but not too long after a development company was trying to buy her property and many others in her older, modest neighborhood. A widow not too many years after moving in with her World War II Vet husband, she raised three children and lived there over fifty five years. Other than social security and some support from her children, my grandma had neither a stone nor a slingshot to sleigh this waking giant. Her house her only asset–but not even fully given her familial help, she could not convince all of her children to keep the house. With a giant crushing the pocketbooks and spirits of her family, my grandmother lost the will to live.

    My grandmother no longer has to deal with these pressures. However, her 87-year-old next door neighbor and others like her do! Unfortunately, as you said, this other widow is even more ill-equipped to face the possibility that she may get kicked out of her house with a much lower settlement. At this point, she can’t afford that alternative.

    If money was ever the root of all evil, it sure is today! Not only are we living beyond our means as a society. Red, Blue, Purple and Green Americans alike are neglecting the weakest members of society in the subtlest ways. We are not listening to one another. We are listening to our iPods and the sound of our own voices. I hope it does not get to the point where I no longer question my own priorities.

    Thanks for writing the article! I am going to share it with my family.

    Most sincerely,
    Rosa

  5. Wedding Cars   |   Oct 29, 2007

    What we need in the UK, where increasingly we build on flood plains, is houses that float. I kid thee not, they do this in Holland these days. In Holland, they know beyond any doubt they will flood so they realistically prepare for it. Here our politicians build any old dwelling any old where safe in the knowledge that by the time any shit hits any fans they’ll be retired or promoted, promoted to Prime Minister in one obvious case.

    Here we need mobile housing as a matter of course for the lower-paid too. We have the problem, unaddressed by anyone, that the lower-paid, after investing all their capital in their property, find themselves unable to move to new areas when work dries up as their property cannot itself be moved, being plumbed into the landscape, and cannot be sold, as work drying up in that area is why they need to move in the first place. They can’t afford to move to any new areas of low-paid employment, and they can’t realistically be expected to find work in an area where the work has gone from, so they exist on benefits. If they had mobile homes, they could move them relatively cheaply, so it would be economically feasible to move to new areas of employment as they develop.

    I also see the re-emergence of tribe cultures as houses get to be so expensive they have to be lived in by groups of people who will from necessity become tribal cultures. I don’t have to explain the why of that, do I?

    BB