One thing I heard, surely on Mefi, that exacerbates the problem of new McMansion suburbs is the homogeneity of age, career, and loan term of residents. In an older, established neighborhood, even if everyone who bought a loan in the last 4 years was foreclosed, you still have people who've lived there 10, 20, and 30 years.

This thread needs some of your photos, BP!

That is an excellent point, TPAA... kind of like genetic diversity in wildlife, I guess. Too much homogeneity means everyone is susceptible to the same pitfalls.

on preview: Heh, gaspode! ;) If this writer does a book on the subject, I'll offer her my services!

Interesting article, BP. I've seen a lot of "lifestyle centers" go up in the Orlando area. I think they are very well received, especially with young professionals. Most of them don't contain a grocery stores nearby though, which sort of defeats the purpose. I don't see how living on top of the Cheesecake Factory and Chico's creates less dependence on the automobile.

In my city, we have a couple neighborhoods with roughly the same concept. My town's "lifestyle center" neighborhoods are out in the sticks. It is basically a massive housing development with a few businesses in the middle -- a dry cleaner, a doctor's office, etc. I don't think there is even a coffee shop or a food store in the "town square". You must get in your car and drive 10 minutes to the nearest grocery store.

I had often wondered about this BP. There are suburban neighborhoods here that have sprung up in the past few years of large homes on small lots of up to a million dollars. I kept wondering who could afford them, and why anyone with a million bucks to spend on a house would do it there. One person I discussed this with posited that they would get split up into smaller units like brownstones of NYC or something, but I didn't see that happening. Your article kind of confirms my own thoughts. In the city there are advantages to increasing the density that just don't pay off out in the suburb that's not close to anything, and has no public transportation nearby.

When I was buying a house I had a couple of requirements. One was being able to bike to work, and I did better, I can walk. The second was to live in a town, and not a suburban neighborhood no matter how old or what the make-up was, and no "planned communities" with covenants. Plus, I wanted something kind of funky. I was able to meet all three requirements with some searching, and I paid more for my house. I got some crap from people at work for my choice saying I could get a bigger house in a suburb, and the houses in town were overpriced, but then a couple of years later gas prices shot up, and all of a sudden I was a genius since in the meantime house prices went way up as well. I wouldn't call it genius planning, just trying to live by my values. Sometimes it costs more in the short term, but it's something I feel better about.

Yer I called this years ago - McMansion estates are always referred to as the slums of the future. Shoddy building (usually), isolation, bored kids - ugly and doomed to fail.

Everyone needs to read Edge City. It's very old now (1992) but covers basically all of this stuff amazingly well.

(This is a little bit of a tangent.)

What seems to have added to the problem is the house flipping trend. People aren't buying McMansions to live in them, they're buying them to sell them. So, the houses are specifically designed to look great on paper but are awkward both internally and in their relationship to each other.

Now, the scary thing is that people aren't quite over the trend, and the swing back to cities shows it. Here in Chicago, the condo complexes that are devouring the landscape are ugly, poorly designed blocks whose interiors are, again, awkward and absolutely uninspiring places to live. It's leechitecture, taking its value from the area around it, without adding anything. When the pendulum goes back to the suburbs, we're going to have some real crap on our hands to deal with.

What seems to have added to the problem is the house flipping trend. People aren't buying McMansions to live in them, they're buying them to sell them.

This is SO true. I read an article once (but can't find it now) about how McMansions are built to pass the "ten-minute test," because supposedly people decide if they're going to buy a house or not within ten minutes of seeing it.

This explains architectural atrocities like fake brick fronts on houses; the way everything opens into the foyer right at the front door; faux-elegant bathrooms and kitchens that look flashy when you just peek into them. The whole house is a stage set, meant to sell itself. They aren't designed for LIVING in at all. It's market research run amok.

Here's a key quote:

This future is not likely to wear well on suburban housing. Many of the inner-city neighborhoods that began their decline in the 1960s consisted of sturdily built, turn-of-the-century row houses, tough enough to withstand being broken up into apartments, and requiring relatively little upkeep. By comparison, modern suburban houses, even high-end McMansions, are cheaply built. Hollow doors and wallboard are less durable than solid-oak doors and lath-and-plaster walls. The plywood floors that lurk under wood veneers or carpeting tend to break up and warp as the glue that holds the wood together dries out; asphalt-shingle roofs typically need replacing after 10 years. Many recently built houses take what structural integrity they have from drywall—their thin wooden frames are too flimsy to hold the houses up.

I live in a 138 year old townhouse, that's been basically ignored and unmaintained for at least the last 50 years. Fifty years ago, the neighborhood was in a state similar to the ones described in this article, big houses either abandoned or turned into boarding/rooming houses or at best cut up into tiny apartments, sometimes ten units to a house. My house was owed and lived in by the same family for a hundred years but after the father died, they must have been renting rooms out since there are dead-bolts on bedroom doors. They didn't fix anything for years or just did quick and scary fixes like running extension cords through the walls to add new outlets.

The thing is, the house endured all those years of neglect because it was damn well built by the Victorian craftsmen back in the 1870's. The doors are solid hard-wood, the walls are plaster over brick, the mantles are marble, hardware is all solid brass, etc. The place is still almost all plumb and level and you need a masonry bit to put a hole in the wall to hang a picture. The heating system is a little newer than the house but the 70 year old boiler still fires up and pumps hot water through 110 year old pipes and radiators and heats the house. Modern houses are built of some much junk that a few years of neglect will cause them to fall to pieces.

Where I live, every spare bit of land is being used to build blocks of flats. They're often on a busy road because the land they're being built on was previously a petrol station or something. Horrible, ugly blocks of flats with "high specs" - two-bed, two-bath, open-plan living/kitchen room, pale wood kitchen with granite (or faux) worktops, tiny balcony, pale wood-effect floor. Identikit horrors that go on the market for at least £100,000 more than my 1960s built place is worth.

So, take an average young couple in their mid-20s, both working in office jobs in the City, he earning £30,000 as an insurance underwriter, she maybe £25,000 as a secretary. That'd give them a joint take-home pay of around £2,800 a month. They've been saving (or borrow the deposit on credit cards) so from the £350,000 asking price they need to borrow £330,000.

In the days when I was buying my first flat, the rule was that you could borrow only three times your joint income, because that was generally the amount considered to be affordable, taking into account other expenses such as council tax, utilities, getting to work, food, etc. So, in the 'real world', they wouldn't have been able to afford this place, because the amount they could realistically borrow is only £165,000.

But I just went into several websites and put those salaries in and was told that, yes, £330,000 would be no problem.

So, the couple buy their first home, taking out an interest-only mortgage through the broker working for the property developer, getting a heavily discounted interest rate for the first year. Their interest payments for that first year are about £1,100 a month. They pay nothing off the principal.

On their store cards they buy the flat screen TV, the leather sofa, all the stuff they 'need' to live the lifestyle that goes with owning a posh flat. Money's tight, but everything goes on the never-never.

Then at the end of that first year the discount on the mortgage ends and reality slaps them in the face when they have to pay the 'market' interest rate of about 7%. Their payments go up by another £800 a month. They can't move their loan to another lender without paying a hefty exit fee. They get into arrears, miss payments, can't pay their credit cards, and (because it's made far too easy in the UK) they go bankrupt. The debt is wiped out after a year, so they don't have to pay anything back to any of their creditors.

Of course, by then they've split up and moved back in with their parents, and they'll be there forever because they'll never be able to get another mortgage again because they're now on the Council of Mortgage Lender's Register of repossessed borrowers.

This goes on for a few years, all over the UK, until the mortgage lenders realise that far too many of their loans are going into repossession, and they tighten up on how much they'll lend. So the first-time buyers now can't borrow that £330,000 they need, so they can't buy a flat. And the rents charged by the buy-to-let speculators are higher than they'd pay for a mortgage, so they can't afford to rent either.

Thus the properties fall empty and remain empty.

It's not quite reached that stage yet, but it's not far off. A good friend of mine is an estate agent and he said the first-time buyer market is non-existent, and without the new buyers coming in, nobody else can move up the property ladder.

Much of the problem, I feel, is that people have far too high an expectation of what they feel they are entitled to in their first flat. They want 'lifestyle' properties without the resources to back it up. The willingness of lenders to fund this without proper checks and balances as to earnings and affordability is partly to blame, along with unrealistic buyer expectations.

That's why I'm already back living with my mum and resolutely refusing to earn more than £10K. I'm astute and ahead of the game. That's it.

I guess I'm ahead of the curve. When my friends all moved out of the neighborhood for the newer one down the road, Mrs. Doohickie and I said we would sit tight until the Littlest Doohickie finsihed high school. Then when schools don't matter at all, we'll sell the house (which, even with a housing downturn we have considerable equity in), and move back in toward the city.

My evil plan is working out nicely. BWAHAHAHAHAH!

This reminds me of that movie Over the Edge, which seemed to make a few of these same predictions back in 1979.

Hey I loved 1979's "Over the Edge" which seemed to me, when I read the news stories, the premonition of the 1981 murder of fourteen year-old Marcy Conrad which was the impetus behind 1986's movie "Rivers's Edge" and also, I think, to Stephen King's 1982 novela "The Body" that was of course adapted as the 1986 movie "Stand By Me".

Ok so I just got an email from a friend who recommended a song because he heard it tonight on the radio in the car and the DJ said it reminded her of "Stand By Me".

Odd.

As I was saying only yesterday ...

Wow, I've never heard of Over The Edge. And dammit, it's not on DVD! I'd like to see that.

Those are some pretty grim articles, Jan. This sentence struck me:

the boom of the past few years has been fuelled not only by reckless bank lending but also by a “conspiracy of acquiescence” between developers and valuers at best and, in many cases, downright fraud.

In many ways I think the "acquiescence” they write about is the worst of it- it was like a giant shell game, where builders and lenders worked together to sell the idea that property values never, ever go down. It's insane.

Also, it seems that the "McMansion problem" in the U.S. will be more of a "flats problem" in the U.K., judging from what you've described and what those articles are saying. Rather than sprawling, empty, devalued neighborhoods, there will be towering devalued blocks of apartments. At least those should be a LITTLE easier to repurpose as rental property, if they're sound enough not to fall apart at the seams. (That may be a big "if.")

Aha! In spite of what IMDB says, Over The Edge IS on DVD. Cool.