Living Smaller

Big houses may someday look as outdated and impractical as big cars, for many of the same reasons
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In May of 1990, my collegues and I built a demonstration house on the campus of McGill University, in downtown Montreal, to test a thesis of ours: if people thinking of changing houses could experience the advantages of high-quality, smaller, more flexible, and more adaptable houses, they might actually choose smaller rather than larger quarters. The Grow Home was small (1,000 square feet); it included unpartitioned space; it was adaptable to different households; it used good-quality finishes and materials. And it was a row house, only fourteen feet wide. The construction cost was about $35,000, which meant that the selling price in Montreal, including land and all development costs, would have been less than $60,000—about half the price of an average single-family house in Montreal at the time.

The house was fully furnished (by a Swedish manufacturer of do-it-yourself furniture), and it was open to the public for three weeks. Each day a stream of people made their way up the stairs to the porch and through the house. As they approached the house, their first reaction was usually "Isn't it tiny!" And the Grow Home was tiny—fourteen feet is unusually narrow for a row house. Its smallness was exaggerated by its site: it stood alone, like a slice of bread removed from a loaf, surrounded by large university buildings. The Grow Home resembled a doll's house, albeit an elegant one, since the facade was designed in the traditional manner.

Once inside—the first room was the kitchen—people commonly reacted with surprise at the amount of space: "It's much bigger than I thought; it doesn't feel small at all." Fourteen feet is narrow for a house, but it is not narrow for a room, and an eat-in kitchen fourteen feet square is spacious, requiring no compromise in layout or counter space. The feeling of roominess continued in a short corridor, which was wider than usual in order to accommodate bookshelves or, in this case, shallow cupboards. Immediately behind the kitchen (and sharing its plumbing) was the bathroom, which was large enough to include a full-size washer and dryer. At the rear of the house was a small sitting room with French doors leading outside to a pergola-covered deck. Like many of the features in the house, the pergola and the deck were part of a list of options that could be added according to the owner's wishes; one might choose a deck ($610), a wood-strip floor ($545), or varnished oak stairs ($800).

The staircase led to a second floor, which was an unexpectedly large space without interior walls, extending from the front of the house to the rear. Part of this loft was furnished as a baby's room; the other end was the parents' bedroom, with large doors leading to a balcony overlooking the front garden. Movable cupboards replaced built-in closets. It would be possible in the future to create a separate children's bedroom, and there was also enough space for a second bathroom, if one was wanted.

About 10,000 people visited the Grow Home. A questionnaire was made available at the door, and although the 636 responses turned in do not represent a scientific sample, the results were nevertheless revealing.

Understandably, the Grow Home attracted people with modest incomes: half the respondents said that their household incomes were in the range of $15,000 to $34,000. Also understandably, these were relatively young households: three quarters of the respondents were under forty-five. Just over a third were single, and about a third had children; almost 40 percent indicatedthat they were looking to buy their first house. Asked if they would be ready to live in a house smaller than 1,000 square feet, three quarters answered yes. An overwhelming 93 percent approved of the idea of a second floor that could be completed according to their needs. As for the quality of the materials and the finishes, 66 percent found it to be good or excellent, 32 percent checked off "Acceptable, considering the house price," and only three percent indicated "Disappointing." Did they think that the Grow Home was a good buy at about $60,000, including land? Sixty-nine percent said yes. The traditional appearance of the Grow Home appealed to almost all (94 percent) of the respondents.

The experience with the Grow Home suggests that our thesis about small houses may well be correct. The urge to be a homeowner remains strong in Canada, as it does in the United States, and young, first-time house buyers obviously understand that they will have to be flexible and make some compromises in their dreams of a home.

Housing Shocks

It is not really surprising that the grow home met with popular acceptance: the market and the economy have changed in ways that will make everyone compromise and be more flexible. The first of three seismic events that altered how Americans live—and how they must think about buying houses in the future—started as an undetected rumble in the early 1960s, just after the golden age of American housing. Almost three quarters of existing U.S. houses were built after 1940, many in the twenty years following the end of the Second World War. The overwhelming majority followed the same model: single houses for single families. The best-known example, which became a symbol of homeownership throughout the 1950s, was devised by the developer William Levitt. The house was small and uncomplicated, but it had a fully equipped kitchen, the lot was big enough for a garden, and at $7,990—no down payment and $65 a month—in 1949 it was a bargain. Homecoming GIs, impatient to get on with their lives, saw this little cottage as just what they needed.

If such houses were uniform "little boxes made of "ticky-tacky," in the words of the scornful song, it was not necessarily the result of a lack of imagination but, rather, a reflection of a remarkable homogeneity in the size and composition of American households. In 1940 the typical number of occupants of a house was four: husband, wife, and two children. Their roles were predictable: Dad worked at the factory or office, and Mom stayed home, kept house, and took care of the kids, who played in the yard.

The composition of the family started to change in the early 1960s. In 1956 the median age at first marriage had been 22.5 years for men and 20.1 years for women, a historic low. Now young people started waiting longer before getting married, which, together with birth control (the pill was first marketed in 1960), affected fertility rates: people had fewer children, and had them later. The size of households shrank accordingly, and by 1989 the average number of occupants in a house had dropped to 2.6.

Households were not only smaller but different. Starting in the 1960s, for a variety of reasons, more women began to work, and by the 1970s they were entering the work force in unprecedented numbers; today in more than half of all families both parents work outside the home. At the same time, divorce rates have risen—it is now estimated that half of all marriages will end in divorce. Hence the increased number of single-parent families, most headed by women. More people are living alone, and single-person households now account for almost a quarter of the total, up from 17 percent, twenty years ago; during the same period married-couple households went down from 71 percent to 55 percent. The typical family—a married couple with young children—in the Levittown cottage is not typical anymore. Indeed, it is now called the "traditional" family, and makes up less than a third of all households.

The second event that changed the American home involved ownership. Homeownership is important to Americans, about two thirds of whom own their homes—twice the rate in France, Germany, and Great Britain. Throughout the postwar period the amount of money that the median-income family could afford to spend on buying a house exceeded the median price of a new house by several thousand dollars, a situation that persisted even though the average price of a new house increased to $16,000 in 1955 and to about $55,000 in 1978. Houses grew more expensive partly because of increased land values and inflation, but as long as family incomes also grew, the rate of homeownership continued to increase steadily. The rising numbers suggested that eventually all gainfully employed people could, if they wished, become homeowners.

During the late 1970s house prices continued to climb as before, while family incomes rose more slowly and inflation and higher interest rates reduced affordability levels. A graph of the chronological progress of the two numbers—median house price and median affordability—would show that until the late sixties the two lines climbed side by side, affordability above and price below. Then they began to converge, until finally, at the end of the decade, they crossed, and moved apart. The median price of a house began to exceed what a median-income family could afford.

The percentage of American households that owned their homes started to decline. The decline was small, but it was the first decline in fifty years. Throughout the 1980s the rate fluctuated, which led some observers to discount the idea that anything important had taken place. Nevertheless, after an all-time peak of 65.6 percent around 1980, ownership had fallen to 63.8 percent by 1988, and among the age group traditionally associated with buying a first home, people aged twenty-five to twenty-nine, last year it stood at 35.4 percent, a drop of eight percentage points since the previous decade. For this group the American dream of homeownership has been severely compromised.

The third and most important event was the October, 1973, energy crisis, with an aftershock during the 1980s. The streetcar, the elevated train, the commuter railroad, and the automobile had made inexpensive suburban land available to housing developers, and the rapid proliferation of single-family houses on large individual plots had been possible only because the rate of car ownership in the United States had been high ever since the 1920s. But for a short time during the winter of 1973 the world seemed to be turned upside down, and there was much talk of moving back to the city and of the benefits of energy conservation and mass transit. Eventually cars became smaller and cheaper to operate, home-insulation retrofitting suddenly became a lucrative small industry, and energy efficiency became a selling feature of new houses, though residential development continued to depend on the automobile just as much as before. Fuel prices declined, and things seemed to be back to normal.

The aftershock came in the form of a series of scientific disclosures about the deteriorating state of the physical environment, particularly global warming. Family cars, as well as power plants, were among the chief sources of carbon-dioxide emissions, so dependence on automobiles was seen as a problem once again. The more general issues of conservation of energy, physical resources, and land were also again raised, and critics were quick to point out that the suburban house lavishly consumed all three. The abundant resources that accounted for the success of the large single-family suburban house—unlimited land, cheap transportation, and plentiful energy—can no longer be taken for granted.

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