Smaller can be better

Posted by Mark Chapman on June 18th, 2012 at 4:42 pm

Dane Hahn

By Dane Hahn

Real Estate

Every town or county has a fairly strict build­ing code that deter­mines what you can build. There are always young buy­ers who want to know if an exist­ing home is “up to code,” which of course it does not have to be. Code is what you have to be “up to” if you are build­ing new or mod­i­fy­ing an exist­ing home. But codes change so often that it would be impos­si­ble to keep an exist­ing home actu­ally “up to” today’s code.

And besides the codes, there are covenants. Most of the sub­di­vi­sions I have dealt with over the years have some sort of covenants and usu­ally some by-laws as well. In the covenants are rules that are stricter than the munic­i­pal codes — the orig­i­nal devel­oper gen­er­ally designed these covenants — maybe 20 to 50 years ago, and more and more, these rules become out­dated. Of course, hav­ing just come from my 50th high school reunion, I can see the logic behind the old rules and I see the evo­lu­tion of the new rules as well. Let me elaborate.

Years ago when we were design­ing covenants, we assumed that a par­tic­u­lar builder may not be the only builder in a sub­di­vi­sion devel­op­ment, and so, in order to cre­ate a uni­fied look and pro­tect each buyer’s invest­ment and the value of the devel­op­ment as a whole, cer­tain rules would be made that all the builders would have to fol­low. For exam­ple, one of our devel­op­ments man­dated: no house would be smaller than 2,000 square feet. To keep the neigh­bor­hood neat, every house would have a two-car garage; fences would only be allowed in the back­yard; every lot would be fully cleared to it’s side­lines so visu­ally the homes would flow together; and every house would have a tile roof to give a “Spanish”look — rules like that.

But that was then, this is now. Today we are think­ing greener, and begin­ning to see that smaller houses are more effi­cient in every way; we’re see­ing that tile roofs leak and blow off in hur­ri­canes; and that two-car garages are nice, but peo­ple still leave their cars in the dri­ve­way or on the street; and regard­ing fences, well, now that we have “invis­i­ble fences,” maybe they’re not as impor­tant to con­tain the dog as they once were.

The rea­sons to build big homes were fairly clear: If every house were big, then the neigh­bor­hood would be one of McMan­sions. It used to be folks would come into the office and say, “we’re qual­i­fied for a $350,000 house, so show us what there is.” Gen­er­ally what appealed to them was the biggest house in their price range. Buy­ers liked that they lived in a“special” neigh­bor­hood, loans were easy to get, and there were many who prof­ited from the ever-bigger houses (banks, munic­i­pal­i­ties and the hous­ing indus­try in par­tic­u­lar), and today these groups are now fac­ing the out­come. To wit, the big houses have become hard to buy or sell just now. (Who has 20 per­cent to put down?)

Today, the aver­age Amer­i­can home is one of the largest in the world (it is four times the inter­na­tional aver­age). When you con­sider the imme­di­ate rev­enue gen­er­ated by over­sized houses through per­mits, con­struc­tion mate­ri­als, labor, infra­struc­ture devel­op­ment and land costs, as well as the ongo­ing prop­erty taxes, and costs of heat­ing and cool­ing, remod­els, main­te­nance of roofs and sid­ing and (per­haps most notably) mort­gage inter­est, it’s no won­der the large homes have been so pop­u­lar with state and cor­po­rate groups alike. But the long-term cost of these poli­cies becomes clear when bor­row­ers are, pre­dictably, unable to make over­sized pay­ments on their over­sized investments.

Our most appeal­ing neigh­bor­hoods are the ones more homog­e­nized, ones allow­ing res­i­dents to walk from home to a cof­fee shop or some other appeal­ing loca­tion. The Vil­lages for one, has excelled in build­ing smaller homes and pro­vid­ing golf cart acces­si­ble shop­ping and vil­lage cen­ters. Watch for more devel­op­ments with these owner-friendly con­cepts in place.

Dane Hahn is a real estate pro­fes­sional prac­tic­ing in New Hamp­shire and Florida. He can be reached at 941−681−0312 or at dane.hahn@gmail.com. See him on the web at www.danesellsflorida.com

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