Sustainability 2019: Affordability Goes Beyond the Walls of a Home

The United States, Canada and most of Europe are in the throes of the most severe housing shortage in more than 60 years. The last time there was this level of shortage was after WWII, when these countries, still reeling from the Great Depression, were suddenly faced with accommodating returning veterans, along with hundreds of thousands of displaced people and refugees.

Today’s shortage is primarily due to the 2008 Great Recession, which was caused by the sudden collapse of a housing-market boom built on an unstable foundation of home purchases made by owners who were unable to keep up with their mortgages. After a nationwide wave of foreclosures, banks were unwilling to give low- or no-down-payment home loans for fear of default. Developers were likewise reluctant to build spec homes because they were unsure whether prospective customers would be able to obtain financing.

To encourage new-home purchases, the Fed dropped interest rates to an all-time low. However, instead of purchasing new, more expensive homes, homeowners took the opportunity to stay in their current homes and refinanced at the lower rates. This dampened new construction and dried up available existing housing.

In addition, the overall cost of construction skyrocketed, making new homes unaffordable to the average worker. One reason for the increase was the cost of labor. Many younger workers find construction unappealing and are choosing different career paths. Now, as contractors vie for workers in a diminishing pool, wages for good tradespeople are climbing, and these costs are being passed on to consumers.

One more significant factor emerged when President Donald Trump imposed tariffs and began threatening trade wars with countries that supply construction materials. Those two actions alone pushed the price of materials up by more than 15 percent.

Compounding this are the effects of climate change on housing. Unprecedented wildfires, floods and increasingly powerful hurricanes have caused the loss of thousands of homes and reduced available resources, driving up the cost of products such as steel and wood.

Many homes are being taken off the market and converted to Airbnbs to subsidize household incomes. Remaining homes on the market are often either overpriced or in such poor condition that they require substantial and costly improvements. Decent, properly priced homes now stay on the market for only two or three days.

All told, the average cost of a new home is nearly 30 percent higher than it was just three or four years ago. For young adults, home ownership is especially unattainable. Many are paying down large college loans or have otherwise been unable to save enough to afford a 20 percent down payment. Instead of buying a home, they are forced to rent in an increasingly expensive rental market. It is anticipated that rents may increase as much as 25 percent during the next five years.

But profound crisis sometimes presents a spectacular opportunity. For instance, the 1930s and ’40s ushered in bold, new visions of workforce housing and completely changed the way the Western world looked at neighborhood development, urban planning, and single- and multi-family housing design and construction. That era introduced plywood, tract housing and winding suburbs. Green lawns and homogeneous neighborhoods became the norm. Residential neighborhoods became isolated from industry and other services, and an automobile-based society was born.

Today our housing solutions must address resiliency as well as affordability because a warming planet will cause more frequent and severe catastrophic weather events.

Developers, architects and planners from many nations are contributing progressive visions to address global housing needs. Three primary patterns of change have emerged from these independent initiatives: zoning revisions, smaller dwelling sizes and improved energy and water efficiency coupled with reduced or eliminated carbon emissions.

Around the world, new communities are introducing nature into the built environment because exposure to nature can reduce stress and improve mental and physical health. Co-housing communities throughout Europe and North America are bringing together like-minded individuals who live in separate, small dwellings but choose to share services such as child care, shopping, transportation, building maintenance and gardening. In our cities, urban infill, including housing located above commercial storefronts, is energizing communities and fostering fiscal interaction.

In pockets of development throughout the United States, homes are getting smaller. The Tiny Home movement may prove to be a short-lived fad, but it has awakened the public to the possibility of living comfortably in small spaces that are creatively designed to accommodate more activities in fewer square feet. A growing number of developments are now mandating maximum house sizes rather than minimum – something unthought of a decade ago – and are integrating nature into their projects, replacing hot roofs and asphalt paving with roof gardens and green spaces.

In response to the global scientific consensus that buildings are the main contributors to greenhouse gasses, architects around the globe are designing houses that can reduce or eliminate carbon emissions. Advocates of programs such as LEED, the Living Building Challenge, the Department of Energy’s Zero Energy Building and PHIUS are developing climate-specific responses to right-size solutions for particular environments.

How can these measures mitigate our affordable-housing dilemma? First, developments such as cohousing and planned urban infill can reduce our reliance on vehicles, which can consume as much as 15 percent of a household income. They can also promote task and tool sharing to the financial burden of expensive day care, elder care and maintenance costs that eat up 25 to 40 percent of income. On top of that, community vegetable gardens may reduce a household’s grocery bills by as much as 20 percent.

Additionally, smaller dwellings on smaller lots have a lower life-cycle cost. Smaller, net-zero-energy homes – those that consume less energy than they generate – cost only 3 to 7 percent more to construct than traditional homes. From the first month of occupancy, these homes can net an economic gain by offsetting water, sewer and energy bills. The federal government and housing-loan industry have recognized this and are initiating programs to underwrite loans they previously avoided, knowing the slightly increased mortgage costs will be offset by monthly utility savings.

What can Door County do to take advantage of these beneficial innovations? We can start by building smaller homes on smaller lots. We can use existing building stock and reimagine empty storefronts as apartments with small groceries and bakeries to serve new urban dwellers. These measures will require modifications to our zoning codes. But other cities and towns have already moved in that direction, so proven strategies for successfully adapting municipalities to forward-looking design measures already exist. Door County has no shortage of creative minds, and by working together, we can address the immediate housing needs and develop long-term sustainable-housing solutions for our future.