The prolonged economic downturn has had many impacts, including widespread layoffs, high unemployment, and mass foreclosures. The most jarring impact for many Americans is the realization that they are not as affluent as they had previously thought. The large homes that were once symbols of prosperity became a financial millstone once mortgage rates reset and the larger economy slowed down. House flipping as a form of instant wealth generation became obsolete in much of the country. Harsh economic climates often shape citizens attitudes towards consumption and personal finance, while policymakers must reconsider past practices. The planning profession can play an important part in helping Americans adjust to an age of austerity.
For the average wage earner, homes will again first and foremost become a place to live, rather than a source of instant appreciation and profit. They will rightfully be seen as means of more gradual middle-class wealth accumulation. Stagnant wages and a sagging labor market for the foreseeable future dictate that the range of available housing reflect economic realities rather than attempts at wish fulfillment. If you looked at housing prices in many areas of the country in recent years and found yourself asking how the average middle-class family could afford the extravagant prices, the answer is now apparent: They couldn’t afford them.
The role for the planning profession is straightforward: Advocate for policies that increase the range of housing typologies in their communities. Zoning that allows for only single family homes on large lots severely limits the flexibility required for modern homebuyers and renters. The push to reduce minimum lot sizes in many communities illustrates an attempt to remedy this policy – many people might prefer to build smaller, (i.e.- more affordable) homes, yet the local zoning often mandate excessively large lot sizes and building footprints. Other attempts include the efforts in many cities to allow more accessory dwelling units, or “mother-in-law apartments.” Cities such as Santa Cruz, Portland and Lexington, MA have developed more flexible guidelines for such units in an attempt to promote a degree of affordability in high-priced locales. Such units have a range of benefits, including helping defray mortgage costs via rental income and allowing for multi-generational housing, whether for children returning home after college or elderly parents.
The role of housing typology in class mobility and family relations has been somewhat overlooked. The classic New England triple-decker (pdf) provided recent immigrants not only a home, but the second and third units often produced rental income and helped build equity (and intergenerational wealth). Child care was also a substantial benefit to these multi-family structures- parents would often drop their children off upstairs with other family members while they went to work. The typical home built in the past fifty years does not allow for these benefits without extensive (and expensive) remodeling, yet such housing would allow many families to alleviate the financial pinch of recent years.
The triple decker had very real design detriments (pdf) and needn’t be romanticized. Modern multi-generational housing can take many different forms and still perform essentially the same functions. Given the decimated retirement accounts of Boomers and the limited employment options for their children, multi-generational housing is likely to become as essential financial life raft for many families.
Yet increasing the range of housing options doesn’t necessarily mean multi-generational structures. The movement towards downsizing traditional style homes is often cited as an option for frugal living, not to mention nascent trends towards tiny homes and other unorthodox structures. Regardless of the circumstances or motivations, it’s clear that for many Americans, a large single-family house isn’t the optimal living arrangement. Planners and policymakers should ensure that their communities allow the flexibility to reflect the range of housing options to accommodate the changing economic and demographic trends of a less affluent, more prudent American middle class.