McMansion Hell Around the World: Where and Why Do We Build McMansions
Hello Friends!
My apologies for the late post - my faithful laptop of 5 years died on Saturday, and I have been in IT Hell (someone make that a blog pls) getting my files off of my hard drive, in the meantime learning a valuable lesson about keeping things in the cloud. Anyway, I hope you like words, because that’s what this article mostly is.
I receive emails all the time about McMansions built in countries outside the USA. I’m here this week to briefly examine where and why McMansions are commonly constructed (and why the US has the vast majority of the world’s gross houses.) For the next five Sunday posts, I will be doing a special on the houses of each of these countries:
Canada
Australia
Isolated, yet entertaining cases to be covered in the coming weeks:
Ireland (specifically during the housing bubble, less-so now)
China
Eastern European ex-Soviet countries
Now, as those of you who are also obsessed with @uglybelgianhouses may know, ugly houses transcend geography. However, not all ugly houses are McMansions. I taxonomize McMansions to be houses built after 1980, having 3,000+ square feet, constructed with low-quality materials/craftsmanship, and use a mishmash of architectural symbols to invoke connotations of wealth or taste, executed via poorly thought-out exterior and interior design.
Why, then, do certain countries build McMansions, and others do not?
Available Land
In order to build large houses in low-density neighborhoods, you have to have space into which you can sprawl. That being said - having lots of land does not directly correlate with having more large houses, however it is one of many factors favoring the formation of low-density, often greenfield (unoccupied lands used for agriculture, landscape design, or left alone indefinitely) developments where large houses are commonly found.
If we look at average house sizes around the world, the US, Australia, and Canada continue to have the largest homes.
Chart Source
However Russia, the largest country in the world by square-footage, has some of the smallest house sizes. This is due to a number of factors including the amount of habitable vs inhabitable land, a predilection towards living in dense cities, and the relatively small amount of new housing stock built each year.
Private Transportation Infrastructure (CARS!)
The countries with the largest houses are highly linked to car use and infrastructure for private transportation. Enjoy some data:
Sources: Columns 1 & 2 • Column 3 • Column 4 Columns 5 & 6: National Geographic Greendex*** • Column 7
*** Walking or biking frequency, for 2012. Represents percent of population that walk or ride their bike to their destination either “all of the time” or “often.” Public transit usage, for 2012. Represents percentage who responded that they use public transit “at least once a week” or “every day or most days,” for 2012. (Other options in survey included “at least once a month,” “a few times per year,” “once a year or less,” or “never.”)
As we can see from this graph, the US, Australia, and Canada are more dependent on the car than most other highly developed nations. The amount of existing road infrastructure, gasoline consumption, etc. are a result of car commuting, a byproduct of urban expansion aka sprawl. Because this infrastructure is both convenient and already in place, until we run out of space or come to our senses, we are going to continue sprawling.
Restrictive/Inflexible Zoning Laws
Countries like the US (less so: Canada, Australia, and the UK) have more restrictive zoning laws than places like France, which allow for more flexible development. Zoning is the segregation of land into sections to be used for certain types of uses, such as residential, industrial or commercial.
Example of a zoning map (Santa Clara County, CA) via Richard Masoner (CC-BY-SA 2.0) (Blue is industrial, green is green space, red is commercial, orange = ?)
Low-Density Residential zoning was incentivized during the 20th century, leading to the rapid suburbanization of the US and Canada. Existent zoning is often a barrier to multifamily housing units which are often less expensive than detached single family homes.
The US, for example, has the most convoluted zoning laws in (probably) the world. Zoning laws and housing regulations can include:
Minimum lot size
Minimum home square-footage
Minimum square-footage per room
Minimum square-footage per person
For more information on different building code and zoning regulations, check out this report from Planning.org
Zoning and building codes in the US have tended to benefit larger properties rather than smaller properties, greenfield and tear-down development rather than infill development (development using existing building stock or empty space within existing infrastructure) which is partially why US homes continue to spiral upward in size despite the effects of the Great Recession.
Mortgage Speculation, Products, and Incentivization
Many people ask why the US in particular has more McMansions than other countries. Part of the reason is because the US offers many more government incentives to buy a home.
Chart Source
The US also issued much riskier mortgage products than other parts of the developed world. In an article from immediately after the Recession, economist Nouriel Rumbini put it thus: (emphasis mine)
For the last few decades over-investment in housing – the most unproductive form of accumulation of capital – has been heavily subsidized in 100 different ways in the U.S. government: tax benefits, tax-deductibility of interest on mortgages, use of the FHA, massive role of Fannie and Freddie, role of the Federal Home Loan Bank system, and a host of other legislative and regulatory measures.
The result was that the U.S. invested too much – especially in the last eight years – in building its stock of wasteful larger and larger homes and housing capital and of larger and larger private motor vehicles (whose effect on the productivity of labor is zero) and has not invested enough in the accumulation of productive physical capital (equipment, machinery, etc.) that leads to an increase in the productivity of labor and increases long run economic growth. This financial crisis is a crisis of accumulation of too much debt – by the household sector, the government and the country – to finance the accumulation of the most useless and unproductive form of capital, housing and large private trucks (calling them cars is a misnomer) that provide only housing services to consumers and have no effect whatsoever on the productivity of labor.
According to a 2009 study by the Research Institute for Housing America, there are several differences between the US and Australia, the country with the second largest houses in the world:
In Australia, lending standards were not eased to the same extent as elsewhere. For example, the riskier types of mortgages, such as non-conforming and negative amortization loans, that became common in the United States, were not features of Australian banks’ lending. In addition, Australian mortgages are “full recourse” following a court repossession action, and households generally understand that they cannot just hand the keys to the lender to extinguish the debt. The legal environment in Australia places a stronger obligation on lenders to make responsible lending decisions than is the case in the United States.
Now, riskier mortgages do not necessarily mean that more people will build oversized houses, however riskier mortgages make larger houses easier to buy. This is the number one reason why US houses are so much bigger than other countries - because they are more attainable.
Cultural Traits
It’s not just economics that play into why people in certain countries buy larger homes - it’s culture. The US in particular (Canada and Australia perhaps by proxy) has put a huge emphasis on the large house as a symbol of success and wealth.
Image Source
Suburban living is the cultural picture of the American dream. It wasn’t always, but the development of media such as television coincided with suburbanization and spread its bucolic image far and wide. Later in the 20th century, the obsession of celebrity culture and fine living further solidified the ideal of the large house in the mind’s eye of Americans. In addition, outside the cities, the rental market is drastically small, so homeownership is the norm.
In European countries (for example Italy) and Asian countries (for example Japan), multiple generations commonly live together in one house. Crowded space is associated with family rather than poverty. In America, every person has their own room, because that is our cultural definition of comfort, and until that definition is modified, the US will continue to build larger homes.
Well, that does it for this primer on why we build McMansions. Again, I apologize for the delay! Stay tuned for Thursday’s Arizona McMansion, and Sunday’s in-depth look at the McMansions of Canada.
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