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Mises Economics Blog

A Dream House for the Masses

September 9, 2009 7:53 AM by Mises.org Updates (Archive)

"Affordable housing" is an old slogan and even a worthy goal. It was in our grasp not too long ago, at the tail end of the housing bust, when "McMansions" could be purchased for a song. And what did the policy makers do? They pulled every lever available to drive prices back up as high as possible. FULL ARTICLE by Anna Wheeler

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Comments (13)

  • Ben Ranson

    In the end, it turned out to be cost effective to do away with hand craftmanship altogether at the bottom end of the housing market. The modern manufactured home is an entirely factory-built product.

    Published: September 9, 2009 9:05 AM

  • greg

    Do you know what makes some of those old craftsmans style homes so valuable? It is the land they sit on!

    All houses depreciate with age, the more expensive the house, the more the depreciation. The trick in real estate investment if to buy a lot that appreciate faster than the home depreciates. This is why most condos are such a bad investment.

    Furthermore, the craftsman and American bungalow movement did not drive the market, they addressed the market at the time. Both were short lived and they did not adjust to market changes and they both fadded away.

    As a builder, we must constantly adapt to market trends if we hope to remain viable. Builders must look to the future demands every time they build a spec because it takes close to a year to plan, build and finish a home.

    While interest rates, loan programs, tax credits may have a short term effect on the direction of the housing market, in the long term it is still driven by buyers and sellers.

    Published: September 9, 2009 12:17 PM

  • billwald

    In other words, the raw materials needed to build an appox 600 sq ft house (I can't read the numbers) cost about a quarter of a worker's annual pay. An equivalent figure would be about $10,000 today.

    Marlette will sell and set up a completely finished factory built home with basic appliances for about $53/sq ft, $32,000 for an equivalent house.

    Looks like the cost of a small house has dropped in the last 100 years.

    Published: September 9, 2009 12:45 PM

  • Russ

    The problem is that the government can't decide whether they want "affordable housing", or big profits for the housing industry. Of course, being socialists, they think they can have both, and practically destroy us in the process.

    Published: September 9, 2009 1:34 PM

  • Zoltan

    The building permits alone cost a half years wages for the normal fellow. At least they do in San Diego.

    Published: September 9, 2009 2:45 PM

  • K Ackermann

    This was a great article.

    Progress always has its detractors. In the late 80's, there were many people who loathed computers, because they were threatened by them. Secretaries would find one on their desk, and they thought their days were numbered.

    A machine replaces a worker on an assembly line, but it took 20 people to make the machine, and a new building to make the machine, and the machine had to be shipped, and maintained.

    When people think high-tech, they might think Intel. Intel is served by companies such as Applied Materials, who make the machines that make the chips. One thing I really like about Applied Materials is their sense of art. Many of their machines have a sleek, futuristic look to them, and great paint jobs. They constantly live on the bleeding edge, turning theory into practice. Why not package it to look like a marvel? It is!

    Published: September 9, 2009 4:22 PM

  • Vicki

    The author's comment about simplicity becoming fashionable, and elegance therefore affordable, brings up an interesting aside. The habit of frugality, much needed and highly valued by the working classes of yesteryear, added much to its inherant dignity. There is great dignity, security and virtue in living responsibly.
    It wasn't until socialism enticed the working classes to envy - with the siren song of 0% interest, among others - that they abandoned this dignity for the false god of materialism. What a tragedy.

    Published: September 9, 2009 7:20 PM

  • K Ackermann

    I don't think it was socialism that enticed with 0%. Socialism isn't really associated with materialism, IMO. Socialism is about getting something for nothing. Or actually, something from someone else.

    Frugality is making a comeback. It has become nessesary, and I hope people learn to like it. Like you say, it has virtues.

    Some people will still confuse frugality with a bargain, but hopefully no clerks will be trampled to death in the upcoming shopping season.

    Published: September 10, 2009 12:36 AM

  • Artisan

    But to me the Arts and Craft's failure (limit) seems to be precisely its integration of Art into the industrial age it meant to fight. Industrial age won from the beginning.

    Factories are certainly ugly, but decorating them polls with organic whipstyle shapes don't take that ugliness away. It makes it more odd.

    Beauty in Art has no other purpose than its own individuality. Industrial production doesn't strive for perfection but for functionality. It's one of the reasons why industrial design fads are so much short-lived.

    Published: September 10, 2009 6:52 AM

  • Vicki

    OK, so by the admittedly vague term "socialism" I meant to include all those schemes whereby workers sought to get something for nothing, which, as you say, is really getting something from someone else. This would include union thugs extorting higher wages from employers, the government extorting free education & health care from the taxpayers, and financial institutions offering bigger and better houses for a song. And what did the average worker gain in exchange for the freedom and dignity of living within one's means? Stuff. Admittedly some very cool stuff, but stuff nonetheless. Which is why I call it materialism.

    William Morris' most famous statement contains more than a little common sense: "Have nothing in your houses that you do not know to be useful or believe to be beautiful".

    Published: September 10, 2009 9:22 AM

  • Mushindo

    From the article: 'Surprisingly, the British had never thought to use the Indian Bangla as a template for small houses.'.

    No surprise I'm afraid. Lots of people crammed onto a small island doesn't make for affordable single-storey accommodation - land's too scarce for that. Conversely, in the US, land was too plentiful to consider building up instead of sideways.

    I am curious as to how Ebenezer Howard ('Garden Cities') escaped any mention along with his contemporaries Morris and Ruskin.

    Published: September 10, 2009 9:41 AM

  • Vicki

    Yes, topography has a fundamental role in the design, building & affordability of homes, as mentioned by the author. The affluent can afford to by-pass some of its restrictions - which is why Beverly Hills is the oddest place in the world.

    Another area where the Indian Bangla design is still used is in the Australian outback. There, also, land is abundant. The typical Australian homestead is a bungalow with a wrap-around porch on all 4 sides. Low ceilings protect against the sun & lack of shade trees, and the porch provides much needed outdoor living space and incredible vistas!

    Published: September 10, 2009 11:31 AM

  • gene

    great article, i have always been a fan of the arts and crafts movement and agree that the purpose of art is to incorporate it in everyday life, not hang it on the walls of the elites!

    what is interesting is the "overpriced" psuedo bugalows that are being built today. There is a great chance that even with all the "modern" codes and restrictions, the originals will outlive them. due to our wholesale giveaway of our national forests, we now rely on scraps of lumber and sawdust glued together with toxic chemicals to build our houses. these materials are tested in labs and on computers but not time tested. we shall see!

    Published: September 12, 2009 11:41 AM

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