How our Homes became the Equivalent of a Hummer

“In 1946, when the American post war housing boom started, the average house was 1100 square feet and housed 5 people. Fifty years latter, in 1996 the average house would grow to 2200 square feet and house 2.6 people and by 2007, fueled by easy credit, the average American home would would become the equivalent of a Hummer, “weighing in” at super-sized 2,400 square feet.”

In 1934, during the depths of the Depression, Congress passed the National Housing Act to strengthen a deeply troubled housing market. This act created the Federal Housing Administration (FHA) which was amended in 1938 to create the Federal National Mortgage Association (Fannie Mae) – an entity designed to help mortgage lenders gain access to capital for mortgage loans. An important element of this legislation was to make mortgage funds available to more Americans by protecting lenders from the risk of default. In its earliest days, Fannie Mae nationalized the mortgage industry by creating the first mechanism in America for selling individual mortgages (backed the U.S. government) into a secondary market.

When the FHA and Fannie Mae were created, the housing industry was flat on its back:

  • Two million construction workers had lost their jobs.
  • Housing finance was a fragmented, inefficient and illiquid. Mortgage rates varied considerably from region to region. In some economically distressed regions there were simply no funds available.
  • Terms were very difficult to meet for homebuyers seeking mortgages.
  • Lending institutions would issue a mortgage, collect payments, and file the mortgage away until the principal was paid off. A lack of available, consistently priced capital put a hard ceiling on the number of new mortgages that could be issued.
  • Mortgage loan terms were limited to 50 percent of the property’s market value. Borrower’s were faced with a 50% down payment and a repayment schedule spread over three to five years and ending with a large balloon payment.
  • America was primarily a nation of renters. Only four in 10 households owned homes.
  • Homes were NOT considered as investments and refi’s and equity withdrawals were extremely rare.

In the 1940’s after WWII, the FHA and the GI Bill helped finance millions of homes for returning veterans and their families. This post war period would mark the peak of American economic dominance. We were still the world’s major oil producer AND exporter and due to the devastation of the European manufacturing base, we dominated the world in virtually every industrial and manufacturing sector.

Fueled by cheap and abundant fossil fuel energy, this period would also mark the beginning of an American landscape built around the automobile and the “American (suburban) Dream”. These were “heady” times and the freedom of movement afforded by the automobile combined with affordable housing for millions of returning GI’s would prove seductive. We would build cars and homes as if the gasoline, natural gas, fuel oil, and electricity that made driving and comfortable home dwelling possible would be cheap and abundant forever. The big lumbering gas guzzling V8’s of the forties and fifties would be driven home to the energy guzzling, thinly insulated, drafty homes of a new suburbia. The cars would last about 5 five years. The homes however would last an average of 75 years.

In 1946, when the American post war housing boom started, the average house was 1100 square feet and housed 5 people. Fifty years latter, in 1996 the average house would grow to 2200 square feet and house 2.6 people and by 2007, fueled by easy credit, the average American home would would become the equivalent of a Hummer, “weighing in” at super-sized 2,400 square feet. The peaking of U.S. oil production in 1971, the formation of OPEC in 1973 and the associated energy crisis’ of the 1970’s would force much needed improvements in our building codes. However, today’s homes are still grossly under-insulated and 1/3 of their energy losses are still the result of air leaks through poorly constructed exterior walls! Our home energy standards are possibly worse than our car and truck CAFE standards (federal mileage requirements). Look underneath the hood of our homes and you’ll 500 HP, super charged forced air furnaces lumbering away in our basements and holding the cold at bay with the brute force of natural gas and oil. We are still behaving as if cheap energy sources are forever.

Adding to the problem is the current culture of “homes as investments” and average ownership cycles of only 5 years. We are a culture with a myopic time horizon where granite countertops, super-sized floorplans, and home-equity financed SUV’s trump energy efficiency and solar hot water systems. This “housing bubble” culture may soon be going the way of the dinosaur with the fall of the sub-prime loan market, the collapse of Wall Street’s sleazy and toxic secondary market for home mortgages, and the first serious decline in home values since the great depression. However, the final death blow will come with the peaking of fossil fuel production, fuel shortages, blackouts, and the obvious and urgent need to transform our housing stock into some semblance of energy efficiency.

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9 responses to “How our Homes became the Equivalent of a Hummer

  1. 1)Renewable energy cost outweigh the benefits in most cases. Solar has 10-12 years paybacks, and based on the “5 year” cycle, most consumers won’t make the upgrade. In many cases they cannot afford the downstock, having invest heavily in a “supersized” mortgage payment.

    2) The contractors won’t install these systems unless they are on high end custom homes. No profit return no deal.

    3) These are from an urban prospective. In Rual communities this is not necessarily the case. Farms and ranches pass to family members for generations in some cases so they build for centurys not decades….

    4) There is a movement afoot in NY of all places to build very effeicent homes. I think it will take the “trickle” down effect to get it into the average
    middle class home…

  2. I don’t think that it’s home ownership itself that’s the problem. It’s more the type of home that some people want to build and own. Would you apply your logic to someone who buys an apartment in a city?

    An investment in a home provides stability to owners and the communities in which they buy. You consider neither effect in your argument. Then again, you approach your essay from the perspective of an anonymous suburban “community” and not from the aspect of a traditional town or dense urban neighborhood. You forget that increased ownership in some circumstances (such as the urban environment) revitalizes long-neglected communities and creates a more livable environment. Even if a granite countertop or two does make its way into the picture. What’s wrong with that?

  3. I doubt that transformation of the available housing stock is even feasible at this point. I recently visited Las Vegas, where you can easily find virtual ghost towns of virgin, uninhabited, amazingly cheaply built homes inhabited only by a roaming security vehicle to keep out looters. Who would pay to make developments like this sustainable? We’re in for a big crunch, and further flight to cities as suburbs become uninhabitable, or regress back to quasi-feudal societies. Great article by the way!

  4. The article blurs the issue by combining *size* of a home with the *efficiency* of a home. A well designed large house can use as little energy for heating and cooling as a similar smaller house. In fact the many ‘extras’ missing from small houses, like porches and overhangs, can help contribute to comfort and efficiency. In the days before air conditioning, natural airflow, high ceilings, window placement and intelligent porch design made the home more livable in summer. Some of those features can fight against you in winter, but there’s no need to heat an entire house if only portions of it are occupied. Zone heating, better insulation, and solar efficiency can help make a large house efficient. The ‘start of the housing boom’ 1100 square foot house was a response to the supply-demand situation, for maximizing profit.

    In the future as we spend more time in or near our houses, rather than in our cars and offices, having a large house and ample grounds for home-scale food production will be as important as energy efficiency. Increasing housing density doesn’t necessarily improve energy efficiency, other than transportation efficiency for urban/suburban work patterns. In fact, because dense housing means loss of local food production capacity, dense urbanization can lead to decreased sustainability.

  5. Mike makes a good point. If we built to a zero energy standard then the only difference between a smaller and larger house would be the embodied energy. However, we don’t build to a zero energy standard, we build to the current energy code or to a much lesser degree we build to an Energy Star or LEED standard which are both far short of a net zero energy standard. The sad fact is that energy consumption of homes has been rising as homes sizes have increased.

  6. As a novice broadcaster in the late 1950’s we were told to make a story understandable to “Mrs.Glotz,” and this was not an edict for dumbing down, but for clarity and understanding to the average working American. I love the premise and comments regarding this posting. I also can see the ravages of nature forcing folks to find new ways to heat or cool their existing homes as the “peak oil production” curve starts to precipitously start the rapid slide down the negative side of the bell curve. How, at this very point in time, do we get Mrs. Glotz to see the train heading toward her and get her moving and involved to keep from being run over? Will today’s more tuned-in young people with email, texting, blogs and the availability of endless media outlets and pundits be able to effect a sea change of comprehension, or will it remain another rush to midnight on April 14th that has characterized the average American’s lack of motivation to get done what has to be done?

  7. SInce I own an H3 Hummer, I could be concidered bias but this is the first GM product I have ever owned for personal use. This is one vehicle that has totally impressed me all around. I drive it back and forth to work as well as deep into the mountains of Tennessee since I use it for deer hunting as well as trout fishing.

  8. I suspect that we’re going to start seeing some very interesting low tech retrofits of conventional stick homes in coming years. Cob walls built to “earth berm” a conventional wall. Sun rooms with high thermal mass water tanks built along one or two sides of a house. DIY superinsulation of a room by adding a sheet of rigid insulation over the inside surface of a wall and then another of sheetrock on top of that. High density, companion-planted food gardens. Maybe even the return of water tanks within the top of a house to provide gravity-fed water pressure instead of always needing to run a pump.

    I remember the can do spirit of normal folks doing this kind of thing in the seventies once the bad economy and high oil prices had settled in for a while. And I’m already seeing glimmers of it now.

    Yeah, ideally, I would love to see a nation of scratchbuilt cohousing communities built of AAC and strawbale along streetcar lines with built in swales on every street. But I suspect that we’ll get what is, in some ways, an even better future, of “normal” homes redone by their owners in ways that make them far more ecologically desirable than we might expect.

  9. Thanks for your thoughtful comments Rustin,

    As we face peak oil, peak natural gas, and a very uncertain and costly energy future, the challenge of converting 100 million poorly constructed and thinly insulated American homes to some semblance of energy efficiency will fall to homeowner. I think that we will see great imagination played out as we collectively rethink the American home and invent new survival strategies for dwelling that do not depend on brute force heating and cooling. I’ll be releasing a book titled “CHILL in the Living Room” – “Dwelling in a post PEAK World” next month that describes the coming challenges we will be facing regarding natural gas prices and shortages, water shortages and quality issues, and the electrical brownouts and blackouts that will plague our fragile national grid. In addition to describing the how and why of what we’ll be facing, the book outlines dozens of survival strategies for the homeowner. We are facing 2 or 3 very difficult decades, but I agree with you that in the end we will have transitioned to a state that is “far more ecologically desirable.”

    John Van Doren

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